Hard disk drives aren’t dead yet

By Jim Carbone -- Purchasing, 4/23/2008 9:23:00 AM

Worldwide (HDD) unit shipments grew 18.9% to 516 million units in 2007 up from 434 million from the year before, according to researcher iSuppli. Factory revenue for HDDs grew from $31.2 billion in 2006 to $32.8 billion in 2008.

Beyond strong demand growth from notebook PCs and consumer-electronics products, HDD makers benefited from a second-half cease-fire in the price war that had dictated market conditions over the past three years.

“HDD suppliers apparently have realized that there are no major advantages to gaining a few points of share at the price of profitability,” says Krishna Chander, senior analyst for storage systems at iSuppli. “Profitability keeps the engine of research and development churning in this industry, and HDD makers appear to have decided they don't want to cook the goose that lays the golden eggs.”

Although the price war raged in the first half of the year, the second half brought a rebound and an appreciation of the value of HDDs. Pricing was supported by the arrival of high-capacity 1 terabyte HDDs, a key milestone in the face of technology challenges from NAND flash memory.
Despite competition from NAND flash memory in products ranging from MP3 players to notebook computers, the industry's strong performance in 2007 indicates the HDD isn't ready to quit any time soon.

Still, NAND flash will compete with HDDs in the coming years. Only cost reductions and the continued advancement in HDD technology, driven by profit-funded research and development activities, will keep the industry afloat.

Seagate Technology maintained its lead in the global market in 2007 with its share of shipments rising to 34% up from 33.1% in 2006. The company shipped 175 million HDDs in 2007, up 22% from 144 million in 2006.

Also see: Hard disk drive market turns a profit