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Storage solutions provider Western Digital Corp. (WDC - Analyst Report) recently introduced WD Black2 dual drive. The new hybrid dual drive storage solution, which could be used for upgrading notebooks, single slot and all in one systems and small form factor desktops, provides hard disk drive  (HDD) capacity and solid state drive (SSD) level performance.  

This storage device is expected to enhance overall drive capacity, reliability and performance.  It offloads data usage from the SSD to the HDD, which increases the life of a SSD. The launch of WD Black2 dual drive will help WDC to meet growing business needs with flexibility and offer improved user experience.

Additionally, the new hybrid solution is compatible with laptops, PC operating systems ranging from Microsoft’s (MSFT - Analyst Report) Windows XP to Windows 8.1, which will enables users to manage huge volumes of digital data from computers and mobile devices. However, this Black2 combo SDD/HDD is currently not compatible with Apple’s (AAPL - Analyst Report) Macintosh devices.

The new WD Black2 dual drive features a 2.5-inch 120 GB SSD with a 1 TB HDD.  It also provides 20nm architecture with quad channel NAND processing and 8 GB of space that provide a powerful dual drive solution. The WD Black2 dual drive comes at a Manufacturer's Suggested Retail Price (MSRP) of $299 and is now available online.

According to IT research firm Gartner, worldwide HDD shipments are expected to grow at a compound annual growth rate (CAGR) of 2.8% for 2012 to 2017 period. Moreover, market research firm IDC anticipates revenues from SSDs to increase from $2.5 billion in 2012 to $7.0 billion in 2017.

We believe that Western Digital’s new hybrid dual drive product will benefit from pent up demand in the storage market going forward.

Of late, Western Digital has been expanding its presence in the SSD storage market due to a sluggish demand in the PC market (which primarily relies on HDD). SSDs are now being used in servers due to the reduction in latency, which in turn helps in faster response to real-time applications. Therefore, focusing on SSDs for the enterprise segment looks like a smart move in the current scenario.

However, increasing competition from companies like Seagate Technology (STX - Analyst Report) and Fusion-io, Inc. in the storage space coupled with continuing macroeconomic weakness are significant headwinds in the near term.

Currently, Western Digital has a Zacks Rank #3 (Hold).


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