Maxtor: One Touch Breathes New Life into PCs

Executives at the

Milpitas, Calif.-based maker of disk drives and storage media are talking up the company's OneTouch solutions as alternatives to full system upgrades and as additional security for new PCs.

So while many wonder when a full-blown PC upgrade cycle will commence, Maxtor said it sees potential for a significant "facelift" cycle that includes integration of new, external storage with older systems to extend the life of the complete system.

Some solution providers agree. "There is a trend up toward that," said Michael Poncher, vice president and general manager of Racer Computer, a Phoenix-based system builder and solution provider. "I believe it's because people don't

really want to start replacing systems. The best way would be to have a tower with an internal drive, but that's difficult for a user in a home [to upgrade], and in an IT environment, they're not allowed to."

While many in-house IT workers are reticent to open PC systems for simple storage upgrades, it's easier to just plug something in externally, Poncher said.

Enter Maxtor. Wall Street currently views the vendor's prospects as strong. According to Thomson Financial/First Call, analysts forecast Maxtor's revenue to grow to $4 billion next year from $3.9 billion this year. However, they are also forecasting strong growth in profitability for the vendor. The First Call average predicts Maxtor will show a profit of 58 cents per share for the full year 2003 and an increase of more than 12 percent to 67 cents per share in 2004.

And while analysts still seem split on whether the industry will see a complete system refresh cycle this year or later, Maxtor believes it is ready for either scenario.

In the channel, Maxtor is aggressively positioning its OneTouch backup, external hard drive as a solution for either equipment or full system upgrades.

Introduced late last year, the OneTouch systems range from 80 Gbytes to 250 Gbytes in capacity, and range in list price from about $200 to about $400. Key to the OneTouch systems is the integration of backup software on the external device to obviate the need for installing software on the desktop or notebook.

"[People are] not out there buying new computers until the mechanics break down [or] until the fans stop working and the CPU overheats by accident, or for some reason it's no longer compatible [with] the network software," said Stephen DiFranco, vice president of marketing and business development at Maxtor.

And for those upgrading their systems to new notebooks, Maxtor believes

the OneTouch systems

will have "a very, very approachable backup capability," said Paul Streit, a Maxtor senior product manager. "Clearly, a laptop is under a lot more stress and risk than the desktop."

John Sleiziz, owner of John's Web Site Design, Middleton, Wis., a solution provider and authorized Maxtor reseller, noted that it's not unheard of for customers' employees to have computers with 8-Gbyte

or 10-Gbyte hard drives,systems that are in dire need of an upgrade.

These customers are thinking about going to a larger hard drive rather than a full desktop upgrade, Sleiziz said.