Another sobering report on PC shipment sales underscores the lumps Irvine-based disk drive maker Western Digital Corp. took on Wall Street last year.
Framingham, Mass.-based market tracker International Data Corp. reported that PC shipments in the fourth quarter dropped 10.6% from a year earlier to 71.9 million units. Units sold last year fell below 300 million for the first time since some of the darkest days of the recession in 2008.
Apple Inc. in Cupertino was the only PC maker in the top five to post a sales gain last year.
Several contributing factors led to the slowdown, including the popularity of smartphones and tablets, weakened global currencies, upheaval in Asian markets, longer PC lifecycles, a surge in sales of quality, low-priced PCs in 2014, and the lackluster adoption of the Windows 10 operating system.
The unwelcome mix on PCs led Western Digital’s share price to drop 45.8% last year, erasing $12 billion of its market value in the process. Milpitas-based SanDisk Corp., which is being acquired by Western Digital for $19 billion in cash and stock, fared better, but its share price still dipped 22.4% last year. The share price of WD’s Cupertino-based rival, Seagate Technology, plummeted nearly 45%.
The disk drive segment, a major source of revenue for all three companies, fluctuates from year to year with supply and demand swings. Western Digital has made big strides in the past three years diversifying product offerings away from PCs into the corporate sector and cloud with solid-state drives that use chips instead of spinning disks, and helium-based drives for data centers and big-data customers.
In October, the Business Journal reported that Chinese regulators finally approved the integration of its $4.8 billion acquisition in March 2012 of San Jose-based HGST, which specializes in higher margin corporate storage drives.
It will be interesting to see if the new products and integrations, which include about $900 million in annual cost savings, change Western Digital’s story on Wall Street this year.
Quantum’s New Contract
Quantum Fuel Systems Technologies Worldwide Inc. has inked another contract with Karma Automotive LLC in Costa Mesa as the hybrid, luxury automaker aims to bring its eponymous model back to the market this year.
The Lake Forest-based company will supply software control and system development for the Karma vehicle platform. Financial terms weren’t disclosed.
Quantum has licensed hybrid control software to Karma and received $2 million in unrelated software licensing fees in October and $1 million from the company in November when it exercised its option to acquire joint ownership of the control software.
Karma, formerly known as Fisker Automotive, was acquired in February 2014 in a bankruptcy court auction for $149.2 million by Wanxiang America Corp., an Illinois-based unit of Wanxiang Group, one of the largest auto parts makers in China.
Quantum, which has shifted its strategy to primarily producing and selling natural fuel tanks, recently received a delisting notice from the Nasdaq, as its share price has traded under $1 since mid-November.
Firm Name Change
Anaheim Hills-based Eilers Research, which tracks the technology and the global gaming industries, including the booming daily fantasy sports segment, has changed its name to Eilers & Krejcik Gaming LLC. Majority owner Todd Eilers established the firm in December 2012. Principle Adam Krejcik follows the digital and interactive gaming industry.
