Solid state drives
While diversification seems like an obvious way of not only spreading risk, but further capitalising on brand equity, it has to be approached with caution. The release of a poor product, or even one that fails to differentiate itself sufficiently, can inflict permanent damage on the brand.
We asked McGuire about the next stage in Corsair's diversification. "Obviously the next one is SSDs, but that's slightly more opportunistic," he said. "We're watching where SSDs are going - the volumes are quite small right now - but we do feel there is a performance/enthusiast market there, both in enterprise and consumer. The main one today is still the notebook sector, where people are looking for better performance and better battery life."
Isn't the price premium in comparison with HDDs still too great? "The price per GB of SSD's doesn't have to equal that of HDDs," said McGuire. "Let's assume they [HDDs] get to ten terabytes; I don't need ten terabytes. When I look at the notebook I use for work, I think I have a 60GB hard drive. Unless I'm using it for video or a lot of other stuff, that's fine for me and the mass market for notebook storage is going to be around 60-120GB for some time."
What about the big HDD vendors? Surely when they get serious about SSDs there won't be any room for companies like Corsair. "I look back at the days of Sandisk and Kodak, back when I was at Sandisk, and Kodak owned the film market but never moved into digital," said McGuire. "They didn't want to upset their film business by going digital. I look at Seagate now and remember that Sandisk eventually had a bigger market cap than Kodak, mainly on the back of SD and Micro-SD cards.
"So I don't know where the hard drive guys are going to be, but we think it will be an interesting market for a few years for players like us. It could be not unlike the memory business, where you've got the OEM market dominated by certain vendors, but there are still plenty of opportunities for a company like Corsair in the after-market channel."
