Hitachi,Toshiba,Fujitsu To Form New HDD Company

CNET News reports Hitachi, the Japanese conglomerate, is talking to Toshiba and Fujitsu about forming a new company dedicated to hard drives and storage systems.

The new company would combine the limping hard drive divisions of Hitachi and Toshiba as well as some of the storage systems technology from Fujitsu. Each would own a third.

The three-way deal is being proposed as an alternative to a private equity buyout. Hitachi has been in discussions with equity firm Silver Lake and others about spinning off its money-losing hard drive group, according to sources and news reports. Those talks, however, have not gone smoothly, sources familiar with the discussions said.

If a deal occurs, it will likely occur by April 1, the beginning of the new business year in Japan.

In December, Hitachi said that it wants to improve its hard drive business, but has not decided to sell it. It has not formally commented since. Toshiba and Fujitsu have yet to return requests for comment.

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HD DVD With XBOX 360 Speculated

According to Seattle Times there's a good news for all XBOX gamers(if at all the rumour turns out to be true) which will be made public at the CES.

Seattle Times staff columnist Brier Dudley speculates that Microsoft "may be preparing to license the Xbox gaming platform to consumer-electronics companies".In particular, Microsoft could work with Toshiba to develop a digital video recorder with a hard-drive, high-definition HD-DVD drive and Xbox gaming capabilities. They're already allied against Sony and other backers of the Blu-ray DVD format, and Toshiba could help Xbox finally penetrate the Japanese market.

Microsoft could also make a splash by announcing plans to give the Xbox 360 an internal HD-DVD drive, putting it on par with Sony's PlayStation 3 that has a built-in Blu-ray drive.

But then again, Gates may want to keep everyone in suspense about the next Xbox, in case he decides to return to CES after all.

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