Apart from a modest (and surprising) gain in the most recent quarter[1], PC sales have been in decline for nearly five years, as smartphones (and to a much lesser extent) tablets have become the devices of choice for most consumers. You’d think the fate of companies like Seagate[2] and Western Digital[3] - two of the names synonymous with the golden age of the PC - would be linked to this trend, but a closer look at the financial health of the companies reveal this surely isn’t the case.
The stock price of both companies reached all-time highs in 2014, and after a bit of a slump, both stocks have recovered, bouncing back to not very far from their peaks. What this means is the market forces think that not only are the companies doing alright today, but there’s plenty of grown potential in the future as well.
The companies have been able to do this by moving into new areas beyond the traditional PC business. WD made a big bet with its $19 billion purchase of Sandisk[4], moving into the mobile storage space. Seagate, on its part, has relied on areas like cloud, surveillance, and IoT[5] - sectors where WD also competes - for the bulk of its growth.
Seagate recently held a media event in Singapore where it shared how it sees storage trends playing out over the next few years.
Cloud players like Amazon[6], Google[7], and Microsoft[8] have disrupted the traditional computing market in many ways, but Seagate says they’ve also become an important end market for the company, with the cloud infrastructure spend this year alone said...