Hard Disk Drive
Seagate by a mile
This year we included external hard disk drives (HDDs) in our survey because this market is growing strongly. Amid the slowdown in 2009, the sales of external drives grew more than 100 percent as customers preferred to buy external storage rather than upgrade their internal drives or buy new PCs.
For the third year in a row, Seagate won the title of the most-preferred HDD vendor, and it did so by a fat margin. Western Digital (WD) came second; however, it got significantly fewer votes than Seagate.
While Samsung made a comeback during 2009, it still faces the uphill task of winning back the channel confidence it enjoyed 2-3 years ago. It may be recalled that Samsung was relegated to the fourth position in the HDD ranking in 2008 because of the company’s shift to an import-based model; this led to a severe shortage in supplies, and a major inflow of parallel imports leading to warranty issues and thus a loss of channel confidence.
Hitachi, which ranked third last year, got negligible votes, and failed to even make the final cut.
Product availability
Seagate is the most widely and evenly distributed brand. The company is also the first to launch new models of both external and internal drives in the market.
WD has consolidated its distribution network and improved its market penetration, yet it still suffers from availability issues in the east.
Samsung improved its distribution considerably. However, it has coverage and penetration issues in the east—it polled zero votes from this region.
The lack of a strong authorized sub-distributor network managed by the vendor is one of the key issues with Samsung. Respondents said that this led to over-distribution because all its three distributors sell through their respective and preferred dealers. Also, Samsung not having external drives in its portfolio is a disabler for many resellers.
Price-performance
Price-wise, Seagate commands a premium of 5-7 percent over its peers. For instance, the dealer average selling price (ASP) of an entry-level 250GB Seagate internal HDD is Rs 1,850, while that of WD is around Rs 1,750. Samsung’s 250GB HDD sells at an ASP of Rs 1,700. Seagate 250GB external drive is available at a dealer ASP of Rs 2,800 while that of WD is available at Rs 2,550 according to respondents.
On performance, Seagate is perceived as a far superior brand compared to both Samsung and WD, and with the least failure rates. WD ranks second while respondents perceive Samsung as having a comparatively higher failure rate than the other two.
Partner profitability
Seagate offers slightly less margins due to its dominant position in the market, but makes up for it in terms of higher demand and sales volumes. WD too fares well on partner profitability, but does not have the volume advantage of Seagate. Over-distribution of Samsung led to price discounting thus affecting margins resellers can make, according to respondents.
Marketing and training
Seagate is the brand with the most customer-pull. Some of the respondents polled in this survey reported up to 70 percent market share for Seagate in their region. Retailers said that at least 60 percent customers who come to buy external drives expressly ask for Seagate. Samsung has a greater brand pull than WD; however, the lack of external drives in its portfolio is a disabler for retailers.
In channel marketing and training, Seagate is the most consistent vendor since it runs channel marketing schemes and training programs across regions with regularity. Partners also reported receiving regular product and pricing updates.
While WD conducted some training initiatives during 2009, it is not consistent with its channel communication. Samsung too has started conducting channel meets, but partners don’t get regular information about pricing and new products. Seagate offered regular and relevant channel incentive schemes during the year, followed by WD and Samsung.
Post-sales support
Seagate was rated to have the best post-sales support. Its failure rate is the lowest, and its repair and replacement process is also faster. To WD’s credit, it has won many hearts by establishing its home pick-up model, but its turnaround time still remains higher than Seagate’s.
Samsung was ranked third on this parameter owing to its policy of providing warranty through its distributors. This led to several complications because every time a warranty issue came up, the product had to be taken to the same distributor it was bought from.
Channel policy and management
Although there are some complaints of inadequate channel engagement from certain regions, Seagate continues to enjoy the trust of channel partners on an overall basis. Most reported Seagate as the brand they would most prefer to sell. The vendor has been able to offer a consistent channel policy which reassures channel partners about what they can expect from Seagate.
Besides, due to its long existence in the market, Seagate’s channel managers enjoy a rapport with all the established partners in the industry.
WD has improved its channel responsiveness from 2008, but partners feel the vendor should improve its channel communication and local engagement.
The lack of incentives from Samsung and no interaction with its channel managers has resulted in Samsung being rated low on this parameter.
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