Maxtor adopts broadline strategy for growth

The focus is now shifting towards retail. With its brand gaining more exposure in the global market and the hard disk drive (HDD) industry beginning to increasingly resemble a typical consumer industry, Maxtor Corporation is gearing up to become a `full consumer technology' company.

Maxtor is one of the largest suppliers of HDDs, storage products and solutions. The company distributes its HDDs through its Original Equipment Manufacturer (OEM) partnerships including Dell, Sony, DirecTV, Apple and IBM among others.

Stephen Di Franco, vice president, corporate marketing, Maxtor who is responsible for Maxtor's global marketing strategy including all marketing activities, channel development and corporate branding initiatives, truly believes that a flexible product line and a broad strategy is the way to go. "Distributors and retailers would now have to make a choice about the number of manufacturers they work with. Ultimately, they would end up choosing a company that has the broadest line," he asserted at the Maxtor Media conference held in Singapore. `No killer product application in one area but a broad product line' is the new mantra at Maxtor.

Franco is of the firm opinion that the industry would continue to consolidate to the fewest number of suppliers. "Consolidations, mergers and acquisitions would continue to happen and we would keep our options open," he said, maintaining a tight lip over the future plans in this direction. Maxtor took over Quantum HDD last year to create one of the largest disk drive companies in the world. In September 2001, the company acquired MMC Technology Inc., giving the company control over the media used in
HDDs.

IDC has predicted a 12.7 percent growth in the HDD market on a five year CAGR. Of this the mobile is expected to account for 13.4 percent, high end 10.1 percent, desktop a modest 5.3 percent and consumer a massive 77.3 percent. 

Maxtor has plans to expand presence in the server HDD market with the IDC projecting a 11.5 percent growth on a five year CAGR. "The Atlas 10K III has been shipped to three server OEMs," he said, adding that the company is committed to increasing its share in this market.

The desktop HDD strategy would be to become the lowest cost manufacturer and maintain a market share within 33 percent to 36 percent target range. "The group storage applications need incredible capacity. The 320 GB Maxline instant recall drive is a step towards this direction," Franco asserted. "The Maxtor personal storage strategy would be to offer products that enhance the consumer electronics feel for users," he added.

China continues to be one of the fastest growing markets for Maxtor. "The only challenge here would be to make PCs less expensive. While Western Europe has been constrained by population growth, it is still a great success story. Investments in PCs are being maintained in Africa, Middle East and Dubai. Latin America, however, lacks technology or services support," Franco said.

India poses the next major geographical challenge for Maxtor. India is the second largest market for Maxtor in the APAC region. Maxtor now has to fight for its place in the market with two other existing players - Samsung and Seagate. Franco believes that this is a tough market to crack. "The Indian market is very difficult to understand, but it certainly poses a major challenge before us," he said. Maxtor has already taken the first step in this direction by appointing Yogesh Kamath as the sales manager.

Tony Hsu, VP, Asia Pacific Sales, Maxtor said that India is one of the fastest growing markets. Maxtor already has a direct
presence in China due to a strong channel. In India however, the company has begun to make first rapid strides by targeting OEMs in the first phase. "Service is a major priority here and this is also being driven in India," he explained. "We have formulated three stages for our re-entry into the Indian market. In the first phase, we have targeted OEMs like HCL, Wipro, International, PCS, Vintron and Zenith. We have been very successful in this endeavor so far," he said.

Said Kamath, "We had earlier targeted A-class cities. We had dealer events in Mumbai, Delhi and Bangalore and the response was very good. Most of the importers have started buying material from us. Now we are planning to go to the B-class cities. IDC reports mention that we need to tap business potential of small cities to push our way up. We would also be focusing on the high-end products, which are technologically superior."

"We recently conducted a series of roadshows in Chennai, Hyderabad, Jaipur, Bangalore, Kolkota, Udaipur and Pune. This was in line with our strategy to expand in B and C-class cities and to reach out to more resellers," said
Kamath..

To promote visibility, the company began a program called 'Find the Diamond in the DiamondMax'. Every end-user buying a PC from Maxtor's OEM partners-namely Wipro, , PCS, Vintron and Cerebra - with a built-in Maxtor HDD, stood the chance to be one of the three lucky winners of a and diamond each. 

In 2002, Maxtor's focus would be on three areas, namely resellers, systems integrators and OEMs. 

Maxtor currently has three distributors - Ingram Micro, Cerebra and Cyber Star. Another four marketing representatives have been appointed on a third party set up basis. These would work towards developing the market.

Nanda Kasabe 

(CNS)