The real answer: Seagate CEO’s response to question about MacBook Air

There seems to be some misunderstanding and misrepresentations of what our CEO, Steve Luczo, said in response to a question on our fiscal Q1 quarterly financial results call. As a result there have been many tweets and comments flying around. So, just to make sure we’re clear, here’s the question and answer in its entirety.

Ben Reitzes – Barclays Capital – Analyst
“Then, Steve, I just wanted to ask you philosophically, I have to ask it, about Apple. Today they announced the $999 64-gig MacBook Air, and Steve Jobs made a comment that he thought all notebooks were going to move this way, and I think he was referencing without the disk drive. And I was just wondering, is he right, is he early, and are you seeing any other, on the mainstream PC market, anybody kind of adopting Apple’s curve, which seems obviously — as usual, they’re early on and early adopters. But I was just wondering what you thought of that announcement, and whether you thought that would change the adoption curve for the industry, or if it’s wishful thinking for him?”

Steve Luzco, CEO
“Look, obviously, Steve sits in a position that only Steve sits in, in terms of the offering that they provide to their customers, and it’s obviously pretty compelling. I would say, though, that — from what we know of the offering, for example at Apple, the percentage of their units that they sell with SSDs versus HDDs is a tiny fraction. I think it’s under 3%. Certainly under 5%. Obviously, this isn’t the first product that they’ve had.

“I have an Airbook with an SSD in it that I’ve had for I guess a year and a half now. And I think there are certainly things that are certainly very nice about it, and other things that are a little bit frustrating, and the little bit frustrating parts are the cost and the lack of capacity. I spend a lot of time cleaning out files, so I can make room for not a lot of content, to be honest with you. Are there some users that can operate in that environment and be happy? I think the answer is yes, but I think as Seagate introduced its hybrid drive last quarter, you get basically the features and function of SSD at more like disk drive cost and capacity.

“And in fact, with the additional layer of caching, we believe that downstream from a product perspective, there will be performance advantages to SSD, whether or not that has to do with instant on or application load or what a load looks like a year or two after you have your product versus the day you buy it. I can tell you that my SSD drive takes about 25, 30 seconds to boot now versus the 12 seconds when I bought it, and that’s just an issue more related to OS than it is specifically to the technology, but again, with the hybrid, there’s things that you can do to alleviate that, so your boot times are actually as compelling one and two and three and four years down the road.

“So, do I think that’s where mainstream notebook computing is going, if that’s what your question is? No, I don’t. Do I think that Apple will be successful with that product? Absolutely, because Apple is successful with all of their products, and it’s a very compelling company and a compelling value proposition within their value chain. But I — again, we just view it as more devices that are computing and eating data, and if they are low capacity on the edge, that means you need a lot of storage piping down close to the edge, and whether or not that’s in a NAS box or quote in the cloud or in a local cloud, those are all markets that we serve. So, the more that people do creative things with computers and devices, we’re all for, and Steve is certainly at the forefront of that.”

Thanks for reading. Comments?