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HDD market revenue to drop 12% this year

Posted: 06 Feb 2013 ?? ?Print Version ?Bookmark and Share

Keywords:HDD market? SSD? optical disc drive? tablets? smartphone?

As a result of the proliferation of tablets, smartphones and solid state drives (SSD), global hard disc drive (HDD) market revenue is seen to fall by about 12 per cent this year. This is according to IHS that also said revenue is set to drop to about $32.7 billion, down 11.8 per cent from $37.1 billion last year. HDD revenue will be flat the following year, amounting to $32 billion in 2014, added the market research firm.

"The HDD industry will face myriad challenges in 2013," said Fang Zhang, analyst for storage systems at IHS. "Shipments for desktop PCs will slip this year, while notebook sales are under pressure as consumers continue to favour smartphones and tablets. The declining price of SSDs also will allow them to take away some share from conventional HDDs."

HDD gross and operating margins likewise will decline as a result of continued price erosion. "However, HDDs will continue to be the dominant form of storage this year, especially as demand for Ultrabooks picks up and hard drives remain essential in business computing," Zhang added.

HDDs overall will maintain market dominance because of their cost advantage over SSDs, particularly when higher densities are involved and dollars per gigabyte are calculated. HDD costs and pricing are significantly lower than SSDs, with already falling HDD average selling prices expected to decline further this year by seven per cent.

Moreover, HDDs will continue to be part of storage solutions even in Ultrabooks that make use of an SSD component. The solution, which cobbles hard disc drives together with a so-called cache SSD module, boasts of a superior price-value proposition compared to SSD-only counterparts.

A major growth area for HDDs will be the use of hard disc drives in the business sector spanning the enterprise space, cloud storage, big data and big-data analytics. Bearing the lowest cost of any storage

medium now on the market, HDDs will remain the final destination for the majority of digital content that need to be filed away.

In the parallel market for PC optical disc driveshome to discs like CDs and DVDslosses in both revenue and shipments are similarly expected. The declines stem from a number of reasons, including smaller chassis sizes for PCs, a shift in preference among consumers towards video streaming instead of using physical discs, and cost cutting from PC manufacturers that have lost interest in using optical drives.

In what appears to be a grim scenario, the optical disc drive industry is expected to encounter continued challenges this year, such as those presented by thinner PC designs. Optical drives could eventually be abandoned by PC makers altogether.





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