Legend signs Hitachi

Adelaide-based memory manufacturer and distributor Legend Performance Technology has begun distributing the full range of Hitachi hard drives and has stopped selling Fujitsu and Western Digital (WD) drives in the process.

Under the arrangement, Legend would sell Hitachi Global Storage Technologies' (Hitachi GST) entire range of SCSI and IDE drives -- from the low-end one-inch Microdrive digital media to 3.56 inch Ultrastar enterprise drives -- to its base of 4500 OEM and system builder customers.

"Legend immediately gives us access to a lot of customers we didn't have access to before," said Pete Andreyev, VP, Asia-Pacific at Hitachi GST. "We're really interested in local OEMs and system builders," he said.

Despite appointing Legend, Hitachi would retain distributor Digiland -- which was an IBM hard disk drive partner prior to Hitachi GST's US$2 billion acquisition of IBM's hard disk business last year.

Following post-acquisition restructuring efforts, the Hitachi division reported it had cut its losses by around 70 percent in February this year. The improvement in the hard disk business was aided by the IBM acquisition. The company budgeted to lose US$330 million in its first year of business but ended the year at US$87 million in operating losses.

Brad Dowe, CEO at Legend, said the company had previously been working with Western Digital and Fujitsu but was now better placed running with a single brand.

He said Legend now had a full basket of component products including memory, CPUs, video cards and flash devices to offer its OEM customers.

"Hitachi has the most comprehensive product range -- leading edge products that are a better fit for the Australian marketplace. Western Digital and Fujitsu were exploratory for us," Legend's Dowe said.

Hitachi GST is also pushing exclusive distribution arrangements with all its distributors across the Asia-Pacific region. The company said it had only one distributor in the region that was not selling Hitachi exclusively.

Dowe admitted that overall, the memory market was going into a period of shortage and would be tight for the next two to three years.

In the meantime, Hitachi also launched a partner program for the local channel, offering training, support and financial incentives for system integrators.

Hitachi GST last year beat its targets and moved from being the fourth player behind WD, Maxtor and Seagate to second place based on its full-year revenue, according to an IDC report issued in January.
The company expected to show a net profit in 2004 and a six percent profit margin in 2006.

Hitachi GST's Andreyev, said the company expected to increase its hard drive volume sales in Australia by up to three times this year. He declined to provide local hard drive shipment numbers.