During the last Dec to March fiscal quarter, prices of hard disk drive prices dropped over 10%, sparking an industry-wide panic.

"It was the worst price drop we've seen in our history", said Bill Watkins, Seagate CEO.

So who started?

Well... according to Watkins, Western Digital did, followed by Hitachi "who got crazy", then Samsung followed by Seagate, etc...

"Some of my competitors went nuts on pricing... but, you know, we all peed in the pool", admitted the Seagate exec.

From a profitable industry...

"Look back to December a year ago, I had a gross margin of 24-25% and made little over $300 million. WD had gross margins of 20.5%. Hitachi made money. Samsung made money. Fujitsu made money. Toshiba made money a year ago".

To a sea of red ink!

"Now flash forward to the past March quarter. Within that one year, WD dropped their gross margins from over 20% down to 15%, Hitachi went to making money to loosing $160 million in the quarter, Samsung lost $75 million, Fujitsu brove-even, Toshiba lost $15 million. But what was good was that we made $270 million, we held our growth margins over 20%".

The drive industry dilemma: a growing unprofitable market!

"And here was an industry that grew 17% on units and I gave away 50% of the Maxtor business to everybody else to share. So we probably have effectively 20% growth in the industry and we priced it so that there was no revenue growth produced. It was the most ridiculous screwed up thing I ever seen in my life. But people just started going nuts".

But will it happen again?

"Sure it will. Never under estimate dumb CEOs!", joked Watkins