IDC: Hard disk market to return to growth

The analyst firm claims HDD vendors have pressed the ‘reset button’ following natural disasters decimating manufacturing.

research charts

Hard drive disk (HDD) shipments are set to return to growth following a difficult 2011.

So claims research firm IDC, which believes the natural disasters in Thailand and Japan hit the HDD market hard but the future of 2012 was looking brighter.

HDDs will continue to be the primary storage technology used in PCs and enterprise systems for most of this decade.

The report claimed the first half of this year would continue to focus on repairing factories in the regions, but in the second half, HDD shipments will see a record year-on-year growth of 7.7 per cent following the 4.5 per cent decline in the previous year.

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IDC also claimed the market would achieve a compound annual growth rate (CAGR) of 9.6 per cent between 2011 and 2016.

John Rydning, research vice president of HDDs at IDC and author of the report, said the troubles faced by the industry had given it the opportunity to start again with pricing structures, which had been falling at an excessive rate.

"In many respects, the hard disk drive industry has collectively hit the 'reset' button," he said.

"A reset of the HDD industry structure should allow for the remaining HDD industry participants to slowly reduce HDD prices from current levels at a rate that still delivers value to customers, while at the same time ensuring sufficient funding is available to develop new HDD technologies that are needed to improve HDD capacity, performance, reliability, power consumption, and security."

However, Rydning claimed HDD vendors couldn't return to just providing the basics to an

industry with changing devices and new ways of implementing storage.

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"Long-term revenue growth will only be realised if the remaining participants transform into storage device and storage solution suppliers with a broad range of products for a wide variety of markets," he added.

The other issue with returning to growth for HDDs is also the growing threat of the solid state drive (SSD) market.

A report released at the beginning of March by DRAMeXchange, a subsidiary of larger analyst firm TrendForce, claimed SSDs are set to fall below $1 per GB for the first time in 2012, which would help remove the barrier of high prices and speed up adoption of the technology as a replacement for HDDs.

However, Claus Egge, analyst and partner at Rainmaker Files, claimed there was some way to go before HDDs were taken over by their faster, more expensive cousins.

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"The [shipment] volume is much higher for HDDs than SSDs, 25 times or more," he told IT Pro. "My personal prediction is it will take more than five years before prices converge, and Flash has got its flaws [too]."

"So I don't see SSD usurping HDDs in the coming five years. Most capacity shipped only needs HDD performance [as it] is more than adequate, so SSD will post high growth, but from a lower base."

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Rydning concurred that HDDs are here to stay for a while yet. "SSD adoption is growing, but SSD pricing is not dropping quickly enough to displace HDDs in the majority of new PCs," he told IT Pro.

"The percentage of new PCs shipping with an SSD continues to be a very small.HDDs will continue to be the primary storage technology used in PCs and enterprise systems for most of this decade."

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