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EMC's New Look: Small N' Cheap

Cheaper arrays get EMC into a new market; analysts warn of cannibalized revenues risk

EMC Corp. (NYSE: EMC) today announced an upgraded line of its Symmetrix storage arrays. But it could represent a double-edged sword for the storage behemoth.

On the one hand, the products pack more capacity, network capabilities, and performance into smaller chassis (all of which is "pretty sweet," as Cartman would say).

Additionally, the products are a lot cheaper than EMC's existing offerings, giving it a way to play in the mid-tier bracket of the market, against Compaq Computer Corp. (NYSE: CPQ), Dell Computer Corp. (Nasdaq: DELL), MTI Technology (Nasdaq: MTIC) and others, where analysts say it could do some damage.

"Users believe that EMC has the highest-end stuff, but only those 'elite' users have been willing to pay for itthis box is an effort to get a whole new audience to hop into this class of product," says Steve Duplessie, senior analyst at Enterprise Storage Group Inc..

Duplessie reckons, however, that EMC could also damage itself in the process (the other edge of the sword), by cannibalizing its own revenues from its existing Clariion mid-tier product range. "EMC appears willing to do this in order to steal shares from the others," he says.

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