IBM to exit hard disk drive business


— 3:08 PM on April 17, 2002

Computer industry titan and inventor of the magnetic platter hard disk drive, IBM has announced plans to enter a joint venture with Hitachi to manufacture hard drives. Hitachi will be the primary shareholder in the new company, and will assume responsibility for its day-to-day operations. Reported losses in IBM's OEM technology group - which operates the bulk of IBM's hard drive plants world-wide - was most likely the largest contributing factor in this business decision. On a related note, we have been following IBM's problems with their 75GXP 7200RPM ATA-IDE hard drives for some time now; and given the recent public furor over these drives, this may be a sound manner in which to preserve the "Big Blue" brand-name integrity.

"The winners will be companies that can combine true technical leadership with global economies of scale.   That's what this joint venture is intended to accomplish," said Nicholas Donofrio, IBM senior vice president of corporate technology and manufacturing.

The joint venture will be owned 70 percent by Hitachi and 30 percent by IBM. It will own most of IBM's disk-drive facilities worldwide, including its Cottle Road plant in San Jose.   It will also have rights to IBM's storage patents and inherit 15,000 IBM employees working in manufacturing, sales and research worldwide.

It's always a sad day when a company that created an industry leaves it, but market forces march ever onward. We can only hope that any quality control issues, whether actual or merely perceived, will be resolved by this partnership.
 
   
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