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By | Christopher Williams 17th August 2006 12:12

Seagate to mount global two-pronged channel assault

Will keep Maxtor brand

Seagate will maintain the Maxtor brand in the channel as well as in retail, the HDD vendor has said.

It will use the Maxtor brand to attack to cheap end of the market, where it claimed the other manufacturers are deliberately losing money to gain market share.

Seagate's VP of segment marketing Marc Jourlait said: "Rather than just the Seagate big guns, we have a different set of Maxtor weapons to go into battle against the likes old Samsung, Western Digital and Hitachi."

Seagate acquired Maxtor for around $2bn in a deal that went through in May. Seagate quickly announced it would continue to sell Maxtor retail products such as external hard drives. The fate of Maxtor's volume business and its channel partners was left open.

Following the deal, top brass "had a hunch there might be a dual brand play in the channel", Jourlait said.

After getting the analysts in, Seagate has decided to position Maxtor at the low end of its business; smaller capacities, shorter warranties and, crucially, cheaper. Maxtor will be the vanguard of Seagate's plan to dominate burgeoning markets in China, India, Russia, and Latin America.

The analogy used by Seagate execs for the unusual play is the HP acquisition and subsequent successful use of the Compaq brand. The Maxtor brand will get new products, with its first notebook range.

Because Maxtor no longer exists as a company, resellers will have to negotiate fresh contracts with Seagate. The firm said yesterday there was a little overlap between Maxtor's old disties and its own and it would be looking to maintain relationships.

Jourlait said the cull of 6,000 jobs following the buy-up is more or less complete. Seagate is now working to make Maxtor's factories more efficient by shipping in their own practices, which rely more heavily on robots. ®

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