SCOTTS VALLEY, CALIF. — It pulled in more than $9 billion in revenue last fiscal year and supplies the hard drives that sit inside one-third of the world's personal computers. But Seagate Technology Inc. longs for a little recognition.
Tired of being a faceless supplier of parts for PCs and other electronic devices, Seagate is trying to worm its way into the consumer consciousness with a new attitude and fresh line of retail products.
For years, the company prided itself on not spending a dime on industrial design. But now, in search of revenue opportunities, it's hiring executives away from retail-oriented companies such as guitar maker Gibson USA and Eastman Kodak Co. and enlisting teams of designers to make Seagate's external hard drives stand out on store shelves.
Seagate is trying to do what Intel Corp. did with its "Intel Inside" campaign -- become a name that shoppers look for when they walk into Fry's Electronics or Best Buy stores. Today the semiconductor giant says its brand is valued at $38 billion, thanks in large part to the campaign it started in 1991.
"There's a lot of Intel envy," said Stephen Baker, vice president of industry analysis with NPD Group Inc., a market research company in Port Washington, N.Y. "If you just make widgets and doohickeys that go into a PC or TV, no one knows who you really are."
Seagate, whose offices are on Disc Drive in this mountain town near Santa Cruz, isn't the only technology company trying to recast itself as a consumer company.
Cisco Systems Inc., the networking company, is aiming for the home market with its acquisitions of Scientific-Atlanta, the TV set-top box maker, and Linksys, a manufacturer of home networking gear. SanDisk Corp., which primarily makes flash memory for electronics, is selling its own branded digital music and video players.
For Seagate, competitive pressure has sent it looking for new markets. Prices for hard drives continue to drop even as the storage space on each device increases.
"What they are trying to do is create a solution they can control, and retail has pretty good margins," said David Reinsel, director of storage hardware research for IDC, a research firm. "It's a strategy to offset the pricing aggressiveness from their customers who are buying their components."
Companies such as Seagate risk being ignored by retail customers. But even worse, they risk treading on the toes of their biggest customers -- computer and electronics makers that don't appreciate the extra competition.
