updated 03:50 pm EDT, Wed October 20, 2010
WD warns of iPad effect, compounded by MacBook Air
Western Digital warned late Tuesday that the iPad was leading a charge that could hurt its business. It gave a lower than expected outlook for the fall as he expected Apple and rivals to slow the growth of traditional, spinning hard drives by 10 to 20 percent over the next several months or more. CEO John Coyne tried to reassure investors by asking them to look to the long term, where he saw regular hard drives still leading mass storage for the next 10 years.
The company has lost about 35 percent of its stock value in 2010 after reduced demand in the computer market. Apple has had the iPad on the market since April, but WD has virtually no presence in flash memory.
Analysts and market trackers have suggested an iPad effect at work on the computer business. It has mostly affected netbooks, but the tablet's use of flash memory has been an advantage as it both results in a lighter, smaller device than a netbook as well as an instant-on device.
WD has only sometimes been used in Macs, but the new MacBook Air suggests Apple is looking gradually to cut rotating drives from at least its portable line. Current SSDs are too expensive to be used in mainstream notebooks and desktops as they often cost several hundred dollars, but they are now inexpensive enough for light-demand systems like the new Air. Space and battery savings are also usually negligible in these larger systems.