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Fujitsu withdraws from desktop hard drive market

Fujitsu has announced that it will cease production of 3.5" hard disk drives, citing an unprofitable marketplace. The company will concentrate on the enterprise and mobile segments instead

Fujitsu has announced that is it to withdraw from the 3.5” IDE hard drive market segment. The move, announced at the start of August, comes as the segment recorded negative growth for the first time for the first half of 2001. The company will refocus on production of drives for the enterprise and mobile segments.

Development of new drives will cease immediately, with production and support of existing models of 3.5” IDE drives phased out by the end of 2001, in both 5400 and 7200 RPM devices. The company made the decision to get out of the market to position itself for future development, according to Adam Harris, vice president of Fujitsu Europe.

“Over-supply in the market has caused excessive price erosion which in turn has caused negative profit to all storage suppliers,” he said. “Fujitsu has decided that, since the desktop market will surely in time move to 2.5” product, that it is better to concentrate now on 2.5” and SCSI, which are profitable lines.”

Resources will be focused on the high-speed enterprise drives, and on the smaller 2.5” drives used in notebook PCs. Data storage requirements for other mobile devices and Internet devices, such as set-top boxes and games consoles will also be provided for, with the development of sub-2.5” drives.

“This shift in focus represents a proactive move for Fujitsu, as it targets market segments that offer the greatest potential for mid- to long-term growth,” said Dave Reinsel, research manager at IDC. “In an age where the 3.5” desktop hard drive market is marked by slowing growth and saturation, this move represents a strategic shift in resources designed to capitalise on more profitable segments of today’s market, as well as to position the company for future growth.”

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