Rumblings of Drive Price War Start to Rattle Western Digital

Wall Street's concerns about price wars for disk drives could spell the end of Western Digital Corp.'s long run-up.

The Lake Forest-based drive maker's stock has been on a tear-its shares are up more than 50% in the past year with a market value of about $6.5 billion last week.

The company

Key rival Scotts Valley-based Seagate Technology LLC has seen a similar, though less dramatic, run-up in the past year.

But Western Digital's shares have reversed course recently, slipping about 5% last week. They're off about 15% since their recent peak at the end of February.

The trouble started with Seagate, which last month cut its outlook for the June quarter and reported March-quarter earnings that were in line with expectations but revenue fell short.

The culprit: price cutting on drives by Western Digital and Hitachi Ltd., according to Seagate.