In a CNBC article an investment banking firm, Cowen, believes that Western Digital will succumb to market and competitive forces which ends up benefiting the consumer. Western Digital’s profitability is down this quarter due to competitor tactics of price slashing in an effort to gain more of the emerging SSD (solid state drive) market share. Senior analyst Karl Ackerman goes on to state,
“We think that WDC may have to forfeit market share or margins near term – tackling both at the same time while peers invest in yield improvement is an arduous task that we struggle to support near term.”
This means that Western Digital will have to lower prices to stay competitive and to try and retain their existing share of the market. Ackerman predicts a 30% drop in prices.