Seagate Technology (NASDAQ:STX) recently launched the thinnest ever portable drive under its brand name Backup, with a capacity of 2 terabytes (TB).  The company announced the release of Backup Plus Slim drive just six months after announcing the release of the thinnest ever internal hard drive for ultrabooks and tablets. Seagate also launched a 4TB drive, the Backup Plus Fast, which the company claims is the world’s fastest portable drive.  Seagate intends to provide a platform for users to save personal files, including photos and videos, on-the-go since the drive can be directly accessed from portable devices such as smartphones and tablets.
Over the last few years, we have witnessed Seagate’s primary competitor, Western Digital Corporation (NASDAQ: WDC), bolster its offerings with a string of acquisitions. On the other hand, Seagate has generally been more focused on developing new technology in-house rather than acquiring smaller competitors. Although, Seagate did acquire enterprise storage provider Xyratex last month to enhance its enterprise storage line, the company has generally been ahead of competitors in coming out with new products in the storage segment for desktops, laptops and tablets. This is demonstrated by the fact that Seagate was the first company to introduce the first ever 3TB external drive and the first 1.5TB external portable drive in 2010, the first ever 4TB external drive in 2011, the first drive with density of 1TB storage per square inch and wireless storage drives last year.      Additionally, Seagate’s press releases regarding the new drives mention management’s intention to further commit to product innovation.
New Drives Under The Seagate Backup Banner
- Time Warner’s First Quarter Results Reaffirm Our Stance
- Why Is Dish Network Venturing Into Smartphone Repair Business?
- What’s Hewlett Packard Inc’s Revenue And Earnings Breakdown?
- What Is Chesapeake’s Strategy To Survive The Current Commodity Downturn? What Is Its Progress So Far?
- What is UPS’ Revenue Breakdown By Segment?
- Aeropostale Claims To Be Back After Filing For Chapter 11 Bankruptcy
Seagate uses the brand name Backup to sell portable external hard drives for desktops and laptops. In addition to the the hard drive, users have access to mobile apps and computer applications that make it easy for them to transfer data from their computers, tablets or mobile phones. The apps also enable the users to backup the entire contents of their devices with a single click and even schedule regular backups. The growing requirement of data storage among users due to increasing high definition digital content has driven storage companies to constantly increase the storage capacities of hard drives.
The Backup Plus Fast can transfer data at speeds of up to 220 megabytes per second, which is almost twice as fast as regular hard drives. The 4TB drive aims to cut down the time required by users to back up their data. On the other hand, the Backup Plus Slim is being marketed as being the slimmest portable drive. The company’s emphasis on the portability of these high-storage drives is complemented by extra efforts made by the company to provide the drives in metallic scratch-proof cases.
How The Competing Products Line Up
In concept, the new storage drives are somewhat similar to the personal cloud drives which are already offered by both Western Digital and Seagate (see Western Digital Offers A Personal Cloud To Customers). The personal cloud has essentially the same functionality which the Backup Plus drives aim to offer. Both Western Digital’s My Cloud and Seagate’s Central can be accessed via smartphones, tablets and computers.  Additionally, Seagate’s personal cloud also provides streaming capabilities across multiple devices and also makes use of the Backup software used in the Backup Plus drives. The only major difference in the Backup Plus drives is the high data transfer speed.
The external storage drive segment seems more likely to be cannibalized by the personal cloud rather than the new Seagate Backup Plus drives. However, since the company is aiming for portability and mass storage rather than just providing a unified and consolidated platform for storage, we could see the wireless drives introduced by SanDisk being affected. In the long run, the simultaneous access of external hard drives from multiple devices over local networks could become a common feature, with Seagate likely benefiting substantially. We currently have a $52 price estimate for Seagate which is around 10% lower than the market price.Notes:
- Seagate Backup Plus Slim, Seagate Press Release, January 2014 [↩]
- Seagate Backup Plus Fast, Seagate Press Release, January 2014 [↩]
- Seagate Introduces First 3TB Drive, Hexus, June 2010 [↩]
- Seagate’s First Ever 1.5TB Portable Drive, Washington Post, September 2010 [↩]
- Seagate Ships First 4TB External Drive, Anand Tech, September 2011 [↩]
- Seagate Creates 1TB/inch Space, PC Pro, March 2012 [↩]
- Seagate Launches First-of-its-kind Wireless Drive, PC World, May 2011 [↩]
- Seagate Central Product Info, Seagate.com [↩]