Hitachi to Double CE Hard Drive Shipments

    March 1, 2005

Hitachi Global Storage Technologies is rallying company resources to more than double the total shipment of CE hard drives in 2005.

To achieve this aggressive growth rate, the company will tailor product development, customer support and marketing efforts to target three key consumer segments — MP3/personal media players (PMP), digital video recorders (DVR) and mobile phones. Already the leader in one-inch hard drives for MP3 players, Hitachi will apply that success formula to capture the PMP, DVR and mobile phone segments.

In 2005, Hitachi plans to more than double production of the one-inch Microdrive, including the newly announced smaller one-inch drive, “Mikey,” which is designed to spur the growth of hard-drive-based mobile phones.

Hitachi will also triple production of its 1.8-inch Travelstar product to further penetrate the music jukebox/PMP segment. With the recent announcement of “Slim” — Hitachi’s smaller 1.8-inch product — the company has received tremendous interest in the form factor, with demand potentially rivaling that of the one-inch Microdrive.

In addition, Hitachi plans to increase production of the 3.5-inch Deskstar product for CE applications by more than 50 percent. With enhanced video streaming functionality and 500 GB of storage, the Deskstar product line will provide a powerful storage solution for the DVR segment.

Industry analysts watching the adoption of hard disk drive in consumer electronics have recently predicted that 20-22 percent of all hard drives shipped in 2005 will go into CE devices as compared to 15 percent in 2004. In 2005, based on current data, Hitachi’s doubling of CE hard drive shipments is expected to surpass the overall industry projection.

“Hitachi’s strength in CE hard drives is now validated with IDC’s recent findings and provides a strong basis from which to accelerate our CE business in 2005,” said Bill Healy, senior vice president, product strategy and marketing, Hitachi Global Storage Technologies. “Hitachi’s intensified focus in the CE segment hard drive will mean good news for end-users as we work on developing smaller, high-capacity hard drives that are more rugged, require less power and cost less.”

“In 2004, Hitachi established a credible leadership position on the CE hard drive landscape,” said John Buttress, IDC research manager. “Hitachi’s aggressive plans for 2005 indicate a serious and strong commitment to maintaining a leadership position in this very competitive and high-growth segment.”

According to IDC, Hitachi was in first place in total hard drives shipped for CE devices in fourth quarter 2004 and in second place for the full year. Hitachi led the final quarter of year with 24.7 percent of the CE segment and finished the year with 19.8 percent.

To further support Hitachi’s push into the consumer electronics space, the company plans to expand both the number of retail products offered and the number of traditional and online stores through which they can be purchased. Hitachi plans these developments for the second quarter of this year.

Also as part of its 2005 CE strategy and announced separately, today, Hitachi will open five worldwide Hitachi Design Studios that will specialize in helping customers integrate hard drives into consumer electronic devices. By April, the centers will be open for business in Fujisawa, Japan; Havant, UK; Rochester, Minnesota; Shenzhen, China and Taipei, Taiwan. This strategic move will enable Hitachi to accelerate the adoption of hard drives in CE devices and lead the fastest-growing segment of the hard disk drive industry.

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