Q&A: Seagate CEO talks about the Maxtor acquisition

27.12.2005

Watkins: We use the same technology for all our products. Any volume or revenue I add to this fixed cost comes in on the margin at a much higher gross margin for us. So it becomes a highly synergistic, leveraged proposition for me. Every additional drive I make is a whole lot cheaper than our first one.

CW: What about overlap?

Watkins: There's a lot of overlap.

CW: Don't you think that will hurt earnings?

Watkins: We'll get rid of that and leverage that across an efficient manufacturing and engineering platform.