This slide contains a disclaimer about the forward-looking statements we will be making in our presentations and comments today. Forward-looking statements will be made concerning growth opportunities on the storage industry, our expected financial results, business model and financial goals and our capital allocation strategy. These forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially, including those listed in our report on Form 10-K filed with the SEC on August 20, 2012. We undertake no obligation to update our forward-looking statements to reflect new information or events.I just want to spent a couple of minutes or a minute going over a few logistic items. The agenda for today is in your welcome kit folder at your seat. John Coyne will also be going through it in his opening remarks. We have a 10-minute break scheduled this morning at 10:20. There is a glossary of terms on your welcome kit as well as on the website at the back of the website version of today's presentation, which contains a lot of the terms and acronyms that we'll be using today for your reference. There is also bios of each speaker. A file containing all of today's presentations will be given to each of the attendees today as you leave the event on a WD passport drive. As far as Q&A, we've got 2 Q&A sessions scheduled, one this morning and one this afternoon, and we ask that you hold your questions until those sessions in the morning and afternoon. And during the Q&A sessions, we will provide microphones in the audience, and we ask that each of you state your name and firm before you ask your question and wait for the mic, so it can be -- the question can be heard on the webcast.
Also, a reminder, please, for everyone to put their cell phones on silent mode. And a reminder that no pictures or videos are allowed at the product demos that we have today. We have product demos, as you've seen at the back of the room, and we have a specific time set aside for each of you to spend at least half an hour viewing those demos in the back of the room as well as in the foyer, where our branded products team has a demonstration. And then also, I think many of you have seen our stream machine outside, which is -- and this is the -- today's the first stop of a nationwide tour for that vehicle, showing off and marketing our new router products.Just logistically, in terms of lunch and the demos, we've got 1 hour set aside and half an hour for each. And those of you with green badges will be attending the demos first. Those of you with red badges should have lunch first and vice versa after that first half an hour. I'd now like to introduce the Chief Executive Officer of Western Digital, John Coyne. John F. Coyne Thank you, Bob. Well good morning, everyone. And my welcome to you and my thanks to you for attending today. We have, I think, a very exciting program, and we intend to demonstrate during the day the passion and the passion for change that has been the underpinnings of Western Digital's success formula in driving consistent and continuous profitable growth over the last many years. The vision for the corporation is to empower people, to create and manage and experience and preserve digital content. Our core expertise over the years has been the preservation of digital content, but as that digital content has become completely pervasive in our lives and touches almost everything we do, whether in work or play, the sheer scale of that preserved data and that communicated data is requiring that we put our passions and our skills and our experience and capability to work, enabling people to manage simply and interact and access that information in a simple coherent way, and we see significant opportunity in building on our core preservation business to expand our role in the ecosystem and to ensure that we bring continued added value to customers as we move ahead. And you'll see some of the areas in which we're -- how we're thinking about that and how we're acting to achieve that expanded vision for the corporation.
Here we go. So I want to spend a few minutes of retrospection. If we look at the 50 years, the last 40 of Western Digital's life and the upcoming 10 years, you will see an underlying focus on understanding change, anticipating change in market needs and reacting within the company to position ourselves take advantage of those changing market requirements on a continuing basis. Back in 1970 when Western Digital was founded as a semiconductor designer and marketer, our first products were calculator chips. And through the 10 years, we evolved. And as we entered the PC age, we were primarily a designer and marketer of storage controller chips, floppy and hard drive controller chips, which were delivered to the market for hard drives as an interposer card. So we transformed ourselves from a chip company to a subsystem board level company and became an 80% market share leader in hard drive control.We then develop the WD1010, which was an SoC that combined all of that board-level logic onto a single chip, enabled it to go into a hard drive. And in order to offer the market what it needed in terms of the solution for what was now a requirement for all PCs to have a hard drive embedded in them, we acquired a hard drive company and became a hard drive company through the '90s. And then we transitioned from drives to a broader product line throughout the last decade. And we will talk today about some of our ideas and our focus for the 10 years to come. Let me look a little bit closer at the last 10 years and, again, to look at this theme of understanding market trends, acting in a timely and appropriate way to intersect those trends and continuing to delight customers with the product portfolio and the utility that enables them to succeed in their markets. And over the last 10 years, we started that 10 years as a strong desktop-focused market player. And we built a business model that was focused on quality, reliability, speed and cost leadership. And as we succeeded in that desktop market, we looked at the trends in the market and applied our business model and caught 2 major waves of change in market expansion throughout the decade, the first of those being the proliferation of mobile devices started initially with the laptop PC, and entering that market into 2004, and within 4 years becoming the market leader by applying customer-centric solutions. We listened to customers. We anticipated who the successful guys were going to be in the laptop PC business. We listened to what they needed to succeed, and we delivered that formula, which was a highly desired solution compared with the existing competitive solutions that were in the market at that time, and drove us from entry to market leadership in 4 years in the fastest-growing segment of the market.
Partly driven by that mobility was the need for personal cloud, which at that time was called external storage. And as we listened to customers in that arena, we made investments, very strange for a drive company. We made significant investment in industrial design. And in listening to customers, we understood they wanted things that were good to look at, good to feel as well as functional and utilitarian. We delivered that and created the biggest branded products external storage business in the drive industry, and that business went from -- came into existence and grew at a rapid pace. So anticipating where the market's going, coming up with solutions to intersect that market.And then as we came to the end of the decade, we conceived of and executed the acquisition of HGST to further broaden the product portfolio, to deepen our technology capability, to expand our people resources, the experience and the passion and the capability of the teams to look forward and address the coming 10 years. So building out the existing Western Digital portfolio solutions that addressed mobility and personal requirements and significantly beefing up our capability and product portfolio to address the other side of that market, which is the infrastructure that supports all of that information transmission and information exchange in the enterprise environment. So we feel very comfortable about our position as we now move in to the beginning of the next decade of the company's evolution. And we see that we have a very solid, very broad platform on which to build the future. And you're going to hear today about the 3 pillars of that market as we see them evolving today, the trends in thin and light mobility in individual devices, the trends in the data center and the private and public cloud arena to service all of that data requirement, and then the personal cloud environment in the home and people's connected lives around the family unit. So you're going to hear about each of those 3 initiatives by the company.
And then we continue to look, as we have for the last 40 years, we continue to look at market trends to seek, to discern directions early and to work on having the right product portfolio, the right services and the right cost profile to intersect and actually enable those market trends as we go forward.So the agenda for the rest of the day... [Audio Gap] Steve Milligan is going to follow me and talk about our overall opportunity in the marketplace as we see it and our strategy on a broad basis to address that. Mike Cordano, President of our HGST subsidiary, is going to address the market as we see it in the enterprise and cloud environment. And then Tim Leyden, who leads our WD subsidiary will follow Mike with a view of the mobility market and the opportunities that creates in the connected life. And then Bill Cain -- Dr. Bill Cain and Dr. Currie Munce, our chief technical folks in each of the subsidiaries, will do a joint presentation on the technology that underpins the business and the trends that we see both in our technologies and in competing technologies and how we view that affecting the market in the years to come. We'll then break for the demonstrations, which I believe if you spend some time, there's a lot to learn about not only what the products are that we're showing you and what -- but why they are and how they address the market needs that we perceive. And then in the afternoon, Wolfgang will talk about our business model and our capital allocation strategy. So with that, I'd like again to thank you all for being here. I hope you see as we go through the morning a very capable, committed and passionate team that understands what they're doing and have a significant demonstration of doing it well. And with that, I'd invite Steve Milligan to come up and talk to you about our strategy. Thank you.
Stephen D. MilliganGood morning. Certainly an honor to be here. What I'm going to is I'm going to talk a little bit about what we're going to be doing as a company going forward. First off, I'm certainly honored with the privilege of in January being able to succeed John. John has absolutely done a fantastic job building this company. And some of the points that we will get at is that we have assembled, in our view, an extremely powerful platform in a number of different ways to address the challenges that we're dealing with as an industry. A very important point is that we are arguably at an inflection point, not only for ourselves, but within the broader landscape of what we are -- the environment that we exist in. And so we're going to talk about -- I mean, change to us represents opportunity. And that is really the essence of John's setup, is that Western Digital, not only Western Digital but the heritage of HGST, is that change is our friend, and then we've got to figure out what we're doing to address the challenges and the opportunities that, that presents. So let me get into some of the details. So I'm not going to give you a history lesson. You're all well aware of what's happened over the last several years in terms of the evolution of the computing market. Some of the key points here really are that, number 1, it's all about data. And we know that as it relates to our personal lives. We know that as it relates to our professional lives. More and more of what we do, more and more of what we touch is becoming digital. Not only that, the devices that are either creating that content, interacting with that content, they're changing. And the needs are changing as it relates to that because of the various types of interactions with that data. The other point is that if you look at what's happened in the industry, and sometimes we forget this, but the things that we have done in the storage industry and specifically what we've done in the hard drive industry have helped enable all of these changes. We don't always talk about innovation but we have by virtue of what we've done over the last 50-plus years is innovated in a number of different ways to enable that proliferation of devices, growth in data. And given where we're at from an industry standpoint, given where we're at from a broader landscape perspective, back to the point on inflection, innovation, in our opinion, and the ability to be able to adapt as we move forward is becoming more and more important. And it's presenting for us a very unique opportunity in terms of how we're positioned from a competitive standpoint, from a value perspective, within the broader landscape to take advantage of all of those changes. Read the rest of this transcript for free on seekingalpha.com