Seagate 2008 Annual Report Download - page 7

Table of Contents
Corporation ("EMC") and NetApp, Inc. ("Net App"); and distributors who in turn integrate storage hardware and software into end user
applications.
Storage services. An emerging area within the electronic data storage industry is services and solutions related to the backup, archiving,
recovery and discovery of electronic data.
Demand for Electronic Data Storage
The electronic data storage industry has traditionally been focused on compute applications. We believe that technological advances in
storage technology and a proliferation of non-compute applications in the consumer electronics (CE) market such as digital video recorders,
gaming devices, digital music players and digital cameras are driving the broad, global proliferation and growth of digital content through the:
• creation and sharing of all types of digital content, including digital photos, video, movies and music by consumers and
electronic data by enterprises;
•
aggregation and distribution
of digital content through services and other offerings by companies such as YouTube by
Google Inc. ("Google"), Flickr by Yahoo! Inc. ("Yahoo"), iTunes by Apple, MySpace by News Corporation ("News Corp.") and
Facebook;
•
network infrastructure
, including broadband, cable and satellite that has enabled the access, hosting and distribution of such
digital content;
• enjoyment and consumption of digital content through DVRs, handheld applications, gaming consoles and in automobiles; and
•
protection
of digital content through storage on backup devices and storage services.
As a result of these factors, the nature and amount of content being created requires increasingly higher storage capacity in order to store,
manage, distribute, utilize and back up such content. This in turn has resulted in the rapid growth in demand for electronic data storage
applications and solutions.
We believe that demand for electronic data storage in the enterprise and traditional compute markets continues to grow as the proliferation
of digital content in the consumer space has resulted in additional demand for storage by enterprises, including those that host, aggregate,
distribute or share such content. Additionally, increasing legal and regulatory requirements and changes in the nature and amount of data being
stored has necessitated additional storage.
Demand for Disk Drives
The disk drive industry is sensitive to global macroeconomic conditions and has been impacted by the downturn in economic activity.
Notwithstanding current economic conditions, we believe that growth in digital content will continue to require increasingly higher storage
capacity in order to store, aggregate, host, distribute, manage, back up and use such content. We believe this growth in digital content will result
in increased demand for disk drive products.
Historically, the electronic data storage industry has introduced alternative technologies that directly compete with hard disk drives. SSDs,
using NAND flash memory, are a potential alternative to disk drives in certain applications such as consumer handheld devices and portable
external storage. We believe that in the foreseeable future the traditional compute markets that require high volume storage solutions as well as
the data intensive non-compute markets will continue to be best served by hard disk drives based on the industry's ability to deliver reliable and
cost effective mass storage devices.
Disk Drives for Desktop Computing. The desktop computing market consists of disk drives used in traditional desktop and business
critical applications. We believe the demand for disk drives for desktop computing may be adversely impacted as consumers increasingly choose
notebooks for their computing
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