WD Enters Miniature Hard Drive Market for Consumer Electronics Applications

Serving a rapidly expanding base of customers for mass storage, Western Digital Corp.
(NYSE: WDC) announced today that the company will enter the market for miniature hard drives with a family of 1-inch drives that enable a variety of handheld consumer devices, which are experiencing explosive demand.

An increasing number of current applications, such as MP3 players, PDAs, digital still cameras and digital video cameras, rely on 1-inch hard drives. Newly available and future products enabled by innovations in rotating magnetic storage, such as 1-inch drives, have driven demand in the quickly developing market segment that includes combination digital video/still cameras and cell phones.

"The sub-2.5-inch markets, mostly driven by massive demand for MP3 players and, in the future, by multi-function mobile phones, will be the most explosive growth areas for hard drives," said John Monroe, a research vice president at Gartner. "We are witnessing a global cultural revolution in portable digital entertainment. Hard-drive enabled MP3 players are already
becoming ubiquitous, and by 2008, at least 8 percent of mobile phones could contain a hard drive. These are enormous new markets. It now seems likely that 1-inch hard drive shipments exceeded 8 million units in 2004, up from only 903,000 units in 2003. The compound annual growth rate for 1-inch hard drives should exceed 85 percent through 2008."


WD's miniature drive entry is expected to ship in the second calendar quarter of 2005. The 1-inch hard drive will spin at 3,600 RPM and will be available in capacities up to 6 GB. This new hard drive will be offered with the standard CF II interface and form factor, which enables it to fit into the millions of currently available devices accepting CF II cards, as well as easily integrate into future products. It will feature WD's anti-skip technology that supports uninterrupted audio and video playback.

The drive also will incorporate WD's patent-pending advanced power management techniques to enable the longest possible battery life.

"WD's entry into the sub-2.5-inch segment is in response to customer demand and broadens our market position, enabling WD to participate in an incremental revenue opportunity and profit pool," said Tom McDorman, vice president and general manager of WD's entertainment group. "Sub-2.5-inch hard drives represent another market that demands high volume and predictable supply of highly reliable, high quality products. With our reputation for
best-in-class quality, operating model and manufacturing efficiencies, WD is ready to meet the needs of existing and new customers in this market segment."

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