Lake Forest-based Western Digital Corp. and other disk drive makers could be in for slow growth for the next few years, according to a recent Merrill Lynch & Co. report.
Weak sales to makers of desktop computers could lead to a sluggish 2% growth rate for disk drives through 2008, according to Merrill analyst Shebly Seyrafi.
Drive sales to computer makers “are tracking somewhat less than originally expected,” Seyrafi wrote, due to weak consumer demand for PCs.
The market for drives for servers and other business computers is seen as somewhat better, with prices going up there, Seyrafi said.
Scotts Valley-based Seagate Technology seems to be gaining market share in the so-called enterprise market, he said.
Drives for Microsoft Corp.’s Xbox video game console and for Dell Inc. computers are bright spots for Western Digital, Seyrafi said.
Western Digital’s gains with Dell are seen as coming at the expense of Milpitas-based Maxtor Corp., according to Seyrafi.
Last week, Western Digital made its long-awaited re-entry into drives for portable computers.
Last month, the company upped its sales outlook for the September quarter to $765 million to $790 million. Analysts had been expecting revenue of $771 million.