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The acquisition of Samsung's hard drive business by Seagate could mean higher prices for hard drives because of the reduced competition as well as a new focus on the SSD business, said Todd Swank, vice president of marketing for Northern Computer Technologies (Nor-Tech), a Burnsville, Minn.-based custom system builder.
"Hard drive competition will always be there," Swank said. "I don't see Western Digital and Seagate going against each other too hard. But with the rise in SSDs, there will be less pressure on them in the hard drive business."
However, Swank said, the deal is good news for Seagate which is now moving fast to be a major player in the SSD business after waiting on the sidelines a couple of years while semi-conductor vendors such as Intel and Samsung took the high ground in this market.
"A couple of years ago, I was worried about Seagate," Swank said. "We saw all those SSD vendors come out and prices fall, and Seagate was unable to compete with the semiconductor companies. So I'm happy for Seagate, which now has a new opportunity in the SSD business."
Seagate expects its acquisition of Samsung's hard drive business to close before then end of 2011.