Western Digital Corporation (NASDAQ:WDC) is betting big on reducing the size of flash drive devices to save users money, according to Zacks Equity Reseach.
The rapidly increasing demand for file storage could be a significant driver of revenue and profits in the foreseeable future for the companies such as Western Digital that provide it. If Western Digital’s leadership is correct, the company could have a head start on the competition, which may lift the company’s stock price from its current slump of the past 90 days.
The Western Digital Corporation used the opening of the Consumer Electronics Show 2018 (CES) in Las Vegas to unveil its latest innovation to profit from exponential data and content growth, as well as the need for faster and more efficient storage media. Western Digital introduced its new line of high performance portable flash storage drives and Solid State Discs (SSDs). Because SSDs have no mechanical or moving parts like traditional “hard drive” storage devices, SSDs have faster data access speeds, are exponentially less prone to failures and last much longer than conventional hard drives.
These new additions to Western Digital’s product lineup should help the company solidify its leadership and potentially gain market share in a the global SSD product category, which TechNavio projects will grow at a 17% average annual growth rate between 2016 and 2020.
In addition to Western Digital Corporation’s share price pulling back, the company broke its streak of raising its annual dividend payout to its shareholders. The company has paid the same flat $0.50 quarterly dividend for 12 consecutive quarters.
A positive consumer response to Western Digital’s new product lines should generate enough earnings to get the share price moving again on an uptrend and for the company to resume boosting its annual dividend distributions.
