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Maxtor: Hard Drive Market Soaring

The hard drive market, once mired in a rather dull replacement cycle, is picking up speed on the PC and consumer electronic fronts, according to Maxtor.

Maxtor introduced two new external hard drives at Comdex last month and company executives said the introduction of USB 2.0 and the proliferation of 1394 ports are opening up the replacement hard drive market to a new wave of consumers. The new 3000LE is an entry-level model with 40GB of storage capacity and will connect to a PC through a USB 2.0 port. It will have a $199 suggested retail price. The high-end 80GB 3000DV, $349 suggested retail price, uses a 1394 FireWire connection. These models started hitting retail shelves in October.

“1394 and USB are bringing in those customers who would not have otherwise purchased hard drive upgrades,” said John Hamer, marketing manager for Maxtor’s personal storage business.

The new buyers are open to an installation process that requires a wire to be plugged into a PC port, but would never crack open a computer’s casing to install an internal hard drive, Hamer said. Despite this renewed growth potential for PCs, Maxtor sees the majority of its business taking place in the personal video recorder and hard-drive-based stereo component markets, said Bentley Nelson, the company’s head of strategic marketing.

“The PVR will keep us busy, it is still a huge growth market,” he said. “HDTV is the next area for us. It requires more space to store so we are getting ready. When it hits we will have hard drives to hold this data.” Developing higher capacity drives is not a problem for Maxtor. The company has actually slowed down the rate at which it introduces higher capacity drives. It had been doubling the size about every 10 months, but has since slowed this down to every 12 to 15 months.

Nelson said that while the stereo component market is set to break out, there are still some teething problems to overcome.

“We still need the retailer to grasp the product and to learn how to properly merchandise it,” he said, adding that too many tend to separate the hard-drive-based components from the conventional types being sold. “All stereo components should be sold side by side. There is no reason to separate the digital devices from all the others.”