It has hardly brought any real coverage today, but the flash drive competition to hard drives in PC’s and devices may have died before they were even walking on their own. Flash drives are coming, that is inevitable. But they are not going to kill hard drive makers as some have perhaps feared.
Today’s Wall Street Journal has an article discussing how Seagate Technology, Inc. (NYSE:STX) is getting into the flash drive arena. This was about as predictable as the sun coming up in the east tomorrow. What happens any time a new killer app comes along? The established technology companies launch their own versions or they acquire a smaller fledgling competitor or merely partner with them.
We have had Western Digital (NYSE:WDC) as a potential takeover name on our BAIT SHOP, a list of companies that could be takeover candidates from our Special Situation Investing Newsletter for subscribers, and it is one of the few mid to large-sized technology companies on the list. Since Western Digital is acquiring Komag (NASDAQ:KOMG) the chances of this one being acquired are actually less than before. There is still enough value for tech investors looking at ways to play the resurgence of PC’s and personal storage.
Anyone who thought that these hard drive makers were going to just stand back and let SanDisk (NASDAQ:SNDK) and other flash memory makers bite too far into their business was looking the wrong direction. Western Digital won’t let that initiative get too far behind them either, even if they are way behind Seagate in strength.
Jon C. Ogg
August 23, 2007
Jon Ogg can be reached at email@example.com; he produces the Special Situation Investing Newsletter and does not own securities in the companies he covers.