Seagate, Microsoft CFOs Eye Growing Tablet Market

Pat O’Malley, Seagates’s CFO

With the release of the highly anticipated Haswell processor by Intel Corporation, June 2013 will be remembered as one of the biggest milestones in PC history. This updated Haswell processor is considered one of the largest improvements in any generation-to-generation processor update. As PC makers take advantage of this new technology to create longer battery lives and other extra features, one truth remains certain: PCs and tablets are trending in opposite directions.

As PCs get bigger and bigger with longer battery lives and larger memory, tablets are beginning to get smaller than ever before. Of the top 10-bestselling tablets in America, six of them are based on 7-inch screens. With the global market trending toward mobile devices in recent years, technology giants such as Seagate and Microsoft are planning to soften the blow of a weaker PC market by investing in tablets and ultra-skinny laptops. However, no matter how popular tablets become, technology experts don’t see the PC going anywhere anytime soon.

“Even with a soft PC market, we see ourselves with a product portfolio positioning to get into other areas of growth again – for example, tablets and the thin light notebooks that are coming out,” says Seagate’s CFO, Pat O’Malley, who also highlighted technology trends that will affect production moving forward:

  • PC sales are down. According to the Seagate CFO, the company sold 133 million units during this previous quarter, compared to 157 million in the comparative time from a year ago.
  • Mixed signals. While the market in Europe is unimpressive and the United States market appears to be growing stronger, China continues to send mixed signals, leaving the global market up in the air.
  • Fiscal quarters remain steady. Seagate is expecting a flat gross margin this year for its fiscal first quarter.

Microsoft Forecasts Similar Technology Developments

In a recent conference call, outgoing Microsoft chief financial officer Peter Klein referenced the recognition that the PC market is weakening. Microsoft plans to launch a 7-inch Windows Tablet PC that combines the best that both technologies have to offer. Currently, Windows 8 is supported on tablets with a 10-inch screen or larger.

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