The projections I've seen SSD + HDD will not keep up with an exponential increase in demand. In the next 5 years there is not going to be enough storage manufactured to meet the world's needs, that means SDD manufactures and HDD manufactures win. The cost of storage is going up along with profit margins.
If you're a Google or Amazon where are you going to buy your storage? SSD is at best 6X HDD, if its was only 3% more expensive the big users would still be buying HDD. I've seen forecasts out 100 years before SSD overtakes HDD.
The costs to build and maintain a .013um fab is astronomical, the COO is not constant and in many cases not decreasing. HDD is cheap and fast and the costs SOO is much more manageable for now and in the foreseeable future.
The case keeps building for HDD.
I'll entertain responding:
1. Evolution is a part of the business. One small market disappears, 3 or 4 other markets are created. HDDs in autos, DVRs, home servers. And all that music - exactly what is it stored on in the cloud? Do you ever backup your music - or iPhone?
2. As for laptops, right now the primary transition is to both - small SSD for boot, HDD for storage. Oh - and don't forget to backup. As for tablets, most are complimentary to laptops. And the content these tablets access is stored where? And smartphones?
3. You really need to step outside the USA. Most PCs are not transitioning to SSDs. And in your statement, you still included HDDs (SSDs for boot - where's the data stored?). Oh yeah, don't forget to backup.
4. Simply not true. Or if you believe otherwise, I guess all the market participants are lying.
Margins are a factor af supply and demand. The demand for storage capacity is outgrowing the supply of storage capacity by a factor of 2 or 3 over the next few years. What does that mean?
Revenues DID NOT increase primarily because of cloud build out. In actuality, the cloud build out has been hampered over the last year because of a shortage of high capacity drives. That build out is still in its early stages.
You guys keep missing the point as over and over again it has been stated that HDDs are not going away anytime soon. What's threatened is their sales growth. Strangely, Longs are keen on missing that point.
If HDDs have not eclipse Tapes, SSDs won't eclipse HDDs.
However, just like HDDs drastically curved backing up to Tapes, SSDs are taking a huge chunk out of the storage market.
1. My first mass-storage MP3 player from Archos had a 2.5" HDD in it.
Find me a portal device these days with HDDs in them. That's one market gone.
2. Laptops are now transitioning to SSDs. Moreover, many are choosing tablets (which virtually all use SSDs) over laptops. Another market to be gone whichever way you split it.
3. People are buying less PCs and the few that still buy them increasingly use SSDs for boot drives. A significant market that is being shrunk either way.
4. Cloud storage is converging into a few key players who will have massive buying and discount power. All the smaller players have gone or are going bankrupt. Banking on a handful of companies for clientele is asking for trouble.
We all know that WDC and STX will need to make acquisitions to remain relevant. The longer they wait, the more they will have to pay for those acquisitions.
My bearish sentiment on WDC and STX is not even with the slow demise of HDDs. It simply comes from two facts:
1. that margins will contract greatly in months come. Unless there is another flood to use as an excuse, prices will have to come down and so will margin.
2. revenues increased largely because cloud storage vendors ramped up their purchases to establish their base infrastructure. Now that base has been established, they will continue to buy more storage but only at a slower pace.
So, I am only bearish the near mid-term. There is good premium to enjoy the very short-term and the longer-term requires better visibility into both companies' strategic acquisitions.
His post did not need a sensible rebuttal, although you gave him one anyway.
He had no argument, just three assertions which were invalid and a conclusion.
Where dealing with logic, if the assertion or premise is invalid (or false) you can prove anything to be true.
If he had some stats or facts which were valid and then made an argument for something based on those (debatable) premises, then
that would warrant a rebuttal.
I know it's annoying to see that kind of stuff on the board, but if there's no real fact-based argument, I'd just consider it as spam.
Your ammo is valuable, don't waste it on a mosquito. (and there a lot of dipterans out there)
Good heavens! Overbought with a PEG of 0.3. It's a screaming buy in my book. The only problem with these shares is the constant manipulation of the share price. Wall Street has played games with these shares for a decade. The share price is controlled like a bad dog on a leash. In my opinion. The only way to profit holding WDC is to buy it hold for years. Seldom is it allowed to have a normal valuation.