This weekend's Barron's sorts their Barron's 500 list by P/E, and STX has the lowest w/ a foward P/E of 4.2. The list itself is based on three trailing indicators and STX scored a triple F, tied for dead last. So plus and minus. In another column some guy mentioned the HDD sector: ..."I don't think you'll see any more price wars, and people who think solid-state memory will take over the industry are out of their minds".
Well, we still have the internal combustion engine, now more than 100 years down the road. Electric light bulb still around. Oil hasn't been replaced yet, nor has the conventional telephone. The list goes on.
New technology doesn't always make an older one obsolete, especially when the newer one cannot accomplish as much as the old or accomplish it better.
As other's have mentioned, there is still a huge price gap. OCZ annouced a 1TB drive for about $3200. What's that 30x the going rate for HHD's? Density limits to solid state are being talked about; total mfg capacity of solid state is nowhere near the demand for HHD storage and new factories cost $5B a pop!
Nobody is saying that flash is not demonstrably better than disk drives on many counts. The most compelling reason why disk drives are around to stay for a long while is because there is simply not enough manufacturing capacity to make anywhere near the necessary storage capacity in flash products to serve the current, let alone growing, demand for storage, particularly in the server farms where it is growing the fastest and needs the largest capacity drives.
There is just not enough flash around to supplant drives.
Moreover, the recent price declines in flash that caused SanDisk to disappoint is a further indication that the flash capacity that currently exists more than adequately serves the applications that demand it and that application set is not robustly expanding which one would assume would certainly have happened when disk drives were at peak prices and in short supply due to the flood in Thailand. But it didn't.
Drives are here to stay for a while and will get an even longer lease on life when hybrid drives become widely accepted and available from multiple sources.
An interesting question is whether STX would be doing itself and the industry a favor if it simply provided the hybrid technology for a small license fee to WD and Toshiba to jump start their hybrid product line and get OEMs on board even more quickly.