August 31, 2005

Maxtor Bypasses PC with Home Network Drive

SAN FRANCISCO -- Maxtor Corp., the world's No. 3 disk-drive maker, sees a promising new market selling hard disks that act as home-entertainment hubs whether or not they are connected to a personal computer.

The new system, which Maxtor is set to unveil on Wednesday, makes the company the first hard-disk supplier to begin marketing its product as a home-entertainment center that can bypass PCs and allow consumers to watch movies or play music or video games.

"It is truly an entertainment device without a PC in the equation," said Paul Streit, director of product management at Maxtor's branded products group.

Maxtor, based in Milpitas, California, is best known for making the 3.5-inch disk drives that store data on desktop computers. With the launch of its Shared Storage Plus storage hardware, the company is bypassing the personal computer, traditionally the heart of home computing.

"They are preparing themselves for being a digital hub for the home," said David Reinsel, director of storage research at market research firm IDC.

When connected to a home network, the new drive acts as a digital entertainment media center. For example, one family member could listen to music in a room upstairs while another watches a movie in the living room and a third views a slide show of vacation photos on a laptop in the kitchen, Maxtor said.

Consumers can use the hard drive to manage different music playlists in up to 10 rooms of a house. For movies, separate family members could be watching up to four different movies at a time, Streit said of the multi-tasking capacity of the device.

The Shared Storage Plus drive relies on media-management software from Mediabolic. By relying on industry standards that allow an increasing number of consumer electronics gadgets to easily connect together, the hard drive and related software can essentially do without a PC as its central intelligence.

About 18 million U.S. households use home networks, Maxtor said, with another 7 million planning to own one by 2007.

The Shared Storage Plus drive comes in three sizes: 200 gigabytes, or billion bytes, costing $300; 300 gigabytes for $400 and a higher-capacity 500 gigabyte model to be introduced in October for $500.

The new product is essentially a software upgrade of existing 200 or 300 gigabyte hard drive models introduced earlier this year, which were marketed as a means for home and small business PC users to automatically back up data.

Owners of these existing hard drives can download the home entertainment hub capability for free, the company said.

The home network function puts Maxtor ahead of disk-drive competitors such as Seagate Technology Holdings and Western Digital Corp., Streit said. "We are definitely the first product out with this," Streit said.

(Additional reporting by Eric Auchard)