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IBM Bails Out of the Hard Drive Market

Posted by timothy on from the spinning-down dept.

DJ STORM writes: "IBM has decided to exit the hard drive market citing the market has become too competitive.They plan to sell 70% of the their HD business to Hitachi. The new company name is unknown. One has to wonder if this has anything to do with IBM's troubled Deskstar GXP series." IBM will still have part ownership of the resulting venture, but it sounds like no more Deskstars. Update: 04/17 16:33 GMT by T : You may also find interesting some older posts about IBM's work on increasing hard drive storage (1, 2, 3); hopefully, the new company will continue that R&D effort.

12 of 344 comments (clear)

  1. Notebood Hard drives by robkill · · Score: 3, Interesting

    I'd be interesed in seeing the effect this has on the price of notebook hard drives, since IBM's Travelstar series has a large share of the market.

    --
    DMCA - Chilling free speech since 1998.
    1. Re:Notebood Hard drives by Innominate+Recreant · · Score: 3, Interesting

      If the demand remains constant, *someone* -- either Hitachi, if they buy that product from IBM, or someone else -- will supply.

      At first, there may be spike in the prices, but market forces will adjust that. The hard drive market, as the story said, is very competitive. And where there is competition (unlike the desktop OS market), market forces generally work well.

  2. manufacture vs. research by buzban · · Score: 5, Interesting
    what i don't think this article talks much about is whether or not IBM will continue to conduct the voluminous research it has traditionally done relative to data storage. IBM has patents on tons (a technical term) of HDD and related technologies; the company has a hand in many such products, even when their name isn't on the label.

    personally, i hope they keep their labs working on the research end of data storage, because i'm not sure that there's anyone else to pick up the slack. if there isn't, the pace of "bigger capacity, faster, smaller footprint, more, more, more ..." just might slow down a little.

    1. Re:manufacture vs. research by CynicTheHedgehog · · Score: 3, Interesting

      Perhaps they are leaving the "hard disk" market to persue some other means of mass storage.

    2. Re:manufacture vs. research by parker9 · · Score: 3, Interesting

      being in this field (magnetic storage research) for over two years now, I might actually have something to say...

      IBM has done some wonderful research- they were the first to demostrate 10Gb/in^2 (yeah, dumb units) a few years back w/ a new Read Head. at the time it widely accepted that such densities couldn't be realized. today's products are shipping at these densities.

      personally, i think IBM made the right choice. historically, areal densities have been increasing by over 100% each year. the past year, it's been reduced to 60% and i would expect it won't get better. we're running into hard limits in convential recording.

      i just hope the people at IBM (some of the best in the field) either stay w/ the new venture or at least stay in the field (w/ Maxtor or Seagate).

      oh, please, avoid Western Digital. the horror stories those drives made me go through...

  3. Re:They were the real competitors by garcia · · Score: 4, Interesting

    they might have come up w/the cool technology but they were selling it at rates that just could not compete w/the other vendors.

    It was like their PC lines. They were always $500 - $1000 more than anyone else. Who the hell would want to pay that?

    I have an IBM Microdrive and I love it. But I wouldn't want to pay extra money for a regular HD when I could get something comparable for a shitload less.

  4. Holographic drives by commonchaos · · Score: 5, Interesting

    I really hope that this means they will be coming out with a holographic drive soon, I went to a science fair back in '99 (if memory serves) at the IBM Almaden Research Center. They demonstrated a table sized holographic drive to us - they played a IBM commercial off of it... I've been waiting ever since.

  5. A possible cause... by ZiZ · · Score: 3, Interesting
    It seems to me that numerous times recently, purchasing IBM hard drives labelled as "new" from authorized IBM resellers, what is in fact received is often not new (for instance, with stale installations of Windows 2000, memos, and in one instance, porn) and - in fact - sometimes not even an IBM drive, but a similar case with a well-faked IBM label applied to the top. Every time complaints have been sent to the company, gotten the run-around, complained to IBM, gotten backup, and gotten a refund from the fradulent company - but this isn't a single, isolated event or merchant here...

    Anyway, maybe that has something to do with the 'competetive' market.

    --
    This flies in the face of science.
  6. Too competitive? by fiendo · · Score: 3, Interesting

    IBM is unclear on the concept. When a market experiences a decrease in the number of suppliers, the market becomes less competitive.

    I think what IBM meant to say is that they are less able or willing to compete.

    --
    I went to the city because I wished to live without deliberation.
  7. Too competitive once your premium rep is gone by Jay+Carlson · · Score: 3, Interesting
    For many years, IBM was the performance, feature, and credibility leader in the IDE market. I regularly paid significant price premiums for their drives, and wouldn't recommend any other drive brand for machines that I cared about working. Sometimes they got overtaken on capacity, but my view was that the extra 20% of drive space wasn't useful if the drive was slow or died after a year.

    Then, IBM's reputation got hurt; you all know that story by now. Of course, this happened after most of the IDE machines I run ended up with IBM drives in them. :-( I'm no longer willing to pay $50-100 extra for that IBM brand name. In fact, I don't know if discounting the IBM drives would convince me to buy them at this point.

    I just wish IBM had fixed their quality problems, and without looking like they were covering something up. The "you are only allowed 333 hours of uptime per month" hack didn't help them at all.

    I'd like to go back to the days when I could say "buy IBM brand drives or lose". Now I don't know what to buy or recommend. This sucks.

  8. Re:They were the real competitors by Derkec · · Score: 3, Interesting

    IBM wants (perhaps more importantly their analysts want it to) to focus their energies on things that they can get a high margin for. Services, big servers, and software. Hard drives are a commodity and not a very lucrative business. Hitatchi is a major player in storage which might explain their desire to own some IBM tech. Anyway, hard drives didn't make a lot of profit, so they trim down thier operation to focus on the big bucks. It's a smart move.

  9. Response to the CBDTPA? by Silverhammer · · Score: 4, Interesting

    Could this also be a preemptive response to the CBDTPA? IBM has indeed driven much of the innovation in hard drive technology, so maybe they figure they should get out now while the gettin' is good.