Seagate’s sales continue to plummet

Seagate has announced poor fiscal returns for the third straight financial quarter.

Despite shipping over 39 million hard drives over the quarter (making up 40% of the market), the company continued to post losses due to poor sales in other key areas.

The company adjusted its revenue projections from $2.7 billion to $2.6 billion, and its non-GAAP gross margin from 27 percent to 23 percent. Seagate’s revenue is down 13 percent quarter-over-quarter and 22 percent year-over-year.

This resulted in a 19.8% stock decrease following the close of markets on Friday, 18 April 2016.

The main cause for concern was a reduced demand in the desktop PC market, particularly from China and other East Asian markets.

HDD manufacturers are limited by a base price of roughly $40 for the key materials required to construct a 2.5″ client HDD. This cost comprises several of the critical HDD components, such as motors, heads and spindles. It is nearly impossible for an HDD to dip below $40, regardless of its capacity.

This follows the news that all hardware component sectors failed to meet sales expectations over the last year.