NEW YORK: EMC Corp. will keep slashing prices as needed to fight off rivals
challenging its leadership in the market for data storage machines used to
collect digital information such as e-mail, executive chairman Michael Ruettgers
said on Wednesday.
"Last year on our conference call, we said you could expect to see EMC
get more aggressive on pricing against select competitors in select
marketplaces," he said in a speech to investors at a Bear Stearns
technology conference here. "The expectation is that we'll continue to be
aggressive here in those certain sectors," he added. "We're driving
pricing down aggressively during the period and we'll continue to do that."
EMC has been facing increased competition from companies such as
International Business Machines Corp., Compaq Computer Corp., and Hitachi Data
Systems Corp., a US-based unit of Hitachi Ltd.
"I think it's a very competitive market, and they're saying 'Look, we
said we were going to do this last year, and we're doing it now.' ... They are
under a lot of pressure," said Bear Stearns computer hardware analyst
Andrew Neff. EMC said on Wednesday it captured 34.6 per cent of the nearly $17
billion market for external data-storage equipment in 2000, exceeding the
combined market share of its four closest rivals.
A study by independent research firm Gartner Dataquest showed that EMC picked
up 4.4 percentage points in market share for products that store digital
information such as e-mail and computer network traffic. EMC's external storage
products generated $5.9 billion in revenue last year. The report also appears to
lay to rest claims that EMC's market share is slipping. Hitachi Data Systems,
which boasted it was gaining on EMC, saw its market share drop to 5.3 per cent
from 7.2 per cent, according to the Gartner report.
Compaq ranked second with 10.8 per cent of the market, followed by IBM (8.1
per cent), Hewlett-Packard Co. (7.5 percent), and Sun Microsystems Inc. with 7.3
per cent, according to the Gartner study. Fujitsu Ltd. showed the fastest growth
in the industry, capturing 4.9 per cent of the market compared with only 0.4 per
cent in 1999, according to Gartner. Fujitsu racked up $833 million in storage
revenue in 2000, compared with just $49 million two years ago, according to
Gartner.
Gartner sells reports to the companies involved in the survey. Ruettgers said
in an interview after the presentation that one area where the company would cut
prices was for products around mainframe computers. "In the past we've
talked primarily around the mainframe and some areas like that."
When asked about Hitachi, he said: "They're the ones we're targeting
with this stuff." Ruettgers said that in regard to customer activity and
demand, things were still pretty dynamic, with different geographies all moving
at different paces. "I would say not dramatic improvement," he said.
(C) Reuters Limited 2001.