Revenue: "....for the December 2008 quarter decreased approximately 25% from the immediately preceding quarter, primarily due to a 19% contraction of the total available market. This led to a 23% decrease in the number of disk drives shipped. Our unit demand was also negatively impacted by a modest decline in our market share. Price erosion was partially offset by a favorable product mix, as higher priced enterprise drives comprised a greater percentage of the units shipped.
Revenue for the December 2008 quarter decreased approximately 34% from the year-ago quarter, primarily due to the contraction of the total available market. This led to a 26% decrease in the number of disk drives shipped. Price declines in the December quarter were the most severe in the past 5 years, and were most prevalent in our 3.5-inch and 2.5-inch ATA products. Additionally, our revenue was negatively impacted by the continued transition of demand from 3.5-inch to 2.5-inch ATA products where we have meaningfully less market share. We believe this continued transition also contributed to our modest overall market share loss in the quarter. A favorable mix of products shipped within each market offset some of the revenue decline.
Key Customers: "......key customers, including Hewlett-Packard, Dell, Mitac, EMC, and Asustek...
New Litigation: "Siemens, AG v. Seagate Technology (Ireland) — On December 2, 2008, Siemens served Seagate Technology (Ireland) with a writ of summons alleging infringement of European Patent (UK) No. 0 674 769 (the EU ‘769 patent), which is the European counterpart to US Patent No. 5,686,838 upon which Siemens had sued Seagate Technology in the United States. The suit was filed in the High Court of Justice in Northern Ireland, Chancery Division. Siemens alleges that giant magnetoresistance (GMR), tunnel magnetoresistance (TMR), and tunnel giant magnetoresistance (TGMR) products designed and manufactured by Seagate Technology (Ireland) infringe the EU’769 patent. The Company believes the claims are without merit and intend to defend against them vigorously.
Magsil Corporation and Massachusetts Institute of Technology v. Seagate Technology, et al. — On December 12, 2008, Magsil Corporation and Massachusetts Institute of Technology filed a complaint in the US District Court for the District of Delaware against three Seagate entities, Maxtor Corporation, and twelve other hard disc drive and recording head manufacturing companies. The complaint alleges that unspecified hard disc drives and components thereof infringe two US patents: 5,629,922, entitled “Electron Tunneling Device Using Ferromagnetic Thin Films, “ and 5,835,314, entitled “Tunnel Junction Device For Storage and Switching of Signals.” The complaint seeks judgment of infringement, an injunction, damages in an unstated amount, interest, and costs. The Company is evaluating the complaint.
Qimonda AG v, LSI Corporation, et al. — On December 19, 2008, the US International Trade Commission (ITC) instituted an investigation under section 337 of the Tariff Act of 1930, as amended, at the request of complainant Qimonda AG, naming LSI Corporation and six Seagate Technology entities as respondents. The complaint alleges that LSI and Seagate import products into the US that infringe seven Qimonda patents relating to the design and manufacture of semiconductor integrated chips. The ITC set trial for June 1, 2009. The target date for completion of the investigation and, if a violation of the law is found, issuance of any remedy is February 16, 2010. The Company is evaluating the complaint."
