Can insiders comment on the following comment by Seagate's CEO: http://www.news.com/8301-10784_3-984...l?tag=nefd.top
Seagate CEO: Blu-ray won the battle but lost the war
Posted by Michael Kanellos
LAS VEGAS--The winner in the Blu-ray and HD DVD war is the hard drive, according to Bill Watkins, CEO of Seagate Technology.
"People are saying Blu-ray won the war but who cares? The war is over physical distribution versus electrical distribution, and Blu-ray and HD lost that," he said during a breakfast meeting at the Consumer Electronics Show here this week. "In this, flash memory and hard drives are on the same side. The war is over and the physical guys lost."
Watkins, naturally, speaks from personal interest, but he's got a point. (A former Army grunt and a decades-long Deadhead, Watkins is also one of the more entertaining CEOs in the technology industry to interview.) Consumers haven't been buying Blu-ray or HD DVD players and by the time they do, technology companies will likely be hawking sophisticated on-demand services and Internet Protocol TV. IPTV, in fact, is the dominant theme of the show. Sharp, Samsung, and Panasonic all unfurled content alliances that will let consumers look at headlines or videos from the Net on their TVs.
That's good news for Seagate, because electronic distribution means more hard drive sales. "If (data) is in the cloud I get more storage sales because you have to back up everything," he said.
"Surveillance is a big deal," he added. "You're being filmed right now (we were in a casino) and they've got to store it somewhere."
Hard drive makers are right now living through good times. In the 1990s, excess manufacturing capacity and price cuts led to stagnant revenues and losses for many companies. Since then, many players have dropped out. New markets such as digital video recorders opened up for drive makers. As a result, both Seagate and Rival Western Digital are seeing double-digit growth. Seagate has already upped its revenue guidance twice for the quarter that just ended.
And the future continues to look good. Hollywood, Watkins said, will have no choice but to get into home delivery of content in a big way. People are leaving home less and less. And if the movie studios don't deliver their content to their home, people will watch whatever they can find on the Internet. At CES, XStreamHD is showing off a box that gets on-demand movies from a satellite. Actor Michael Douglas is an investor.
"They will watch lousy content if it is easy to do," he said.