iSuppli Estimates Hard Drive Industry Will Experience 12% Decline In 2013

Subject: General Tech | February 6, 2013 - 09:14 AM |
Tagged: storage, isuppli, Hard Drive

Analytics firm IHS recently released its iSuppli Storage Space Market Brief. According to the report, 2013 does not look good for hard drive manufacturers who may see up to a 12% decline in revenues. In 2012 the hard drive industry brought in $37.1 billion, but IHS estimates only $32.7 billion in 2013. Further, revenue in 2014 is estimated at a mere $32 billion.

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In response to new hard drive technologies and pressure from solid state drives, IHS predicts hard drive selling prices will fall 7%.  Thanks to this price erosion, the report suggests that hard drive manufacturers across the board will experience declines in gross and operating profit margins. The hard drive industry will have to contend with cheaper solid state drives as well as competition within the industry. Seagate and Western Digital will continue to battle it out for market dominance with new technologies and a continued price war that will see margins becoming thinner than ever as $/GB metrics continue to fall rapidly.

Reportedly, the hard drive makers will also have to contend with smartphones and tablets (that use solid state storage) making inroads into the PC market. Sales of traditional PCs are said to be somewhat cannibalized by mobile devices, and those reduced sales will affect the hard drive component manufacturers negatively.

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On the other hand, it is not all bad news for the HDD makers. Hard drives still have per-drive capacity and $/GB on their side. Hard drives may be losing ground to SSDs, but for cheap consumer computers and large storage arrays used in the enterprise space hard drives are still the way to go. Consumer PC sales may no longer be growing rapidly, but big data is still a growing market so that will help the hard drive market.

All in all, 2013 will be beneficial for consumers as they will be getting cheaper and more-dense hard drives. This year is not looking good for the hard drive manufacturers, however.

Image of hard disk drive courtesy Walknboston via Flickr Creative Commons.

Source: IHS iSuppli

February 6, 2013 | 12:54 PM - Posted by Anonymous (not verified)

start cutting prices

February 6, 2013 | 02:33 PM - Posted by Anonymous (not verified)

Hope they enjoyed the milking while it lasted. Must have felt good to sell 1TB hard drives for nearly $300.

February 6, 2013 | 09:41 PM - Posted by Anonymous (not verified)

There is no doubt that people were gouged far longer than needed with the floods as their excuse.

I wonder why there isn't any anti trust investigation for price fixing, because there is overwhelming evidence that the big players like Seagate and Western Digital all had similar prices AND dropped at similar rates apart from normal supply/demand chain. To add insult to injury, almost all the manufacturers lowered their warranty lengths while commanding premium pricing. Many recorded record profits during those quarters. Shame on them.

Can't wait until SSD prices go toe to toe with similar capacity mechanical drives. It's only a matter of time and I wouldn't shed a tear to see either of the big companies go the way of the dodo.

The writing is on the wall for mechanical drives...don't let the door hit you on the way out.

February 7, 2013 | 04:31 PM - Posted by Anonymous (not verified)

the writing is not on the wall for mechanical drives.

MTBF ----

February 9, 2013 | 02:47 AM - Posted by praack

ahh the old price fixing thing- strange that. never figured out what triggered it- could be just the old class action suit helped- oh wait that is gone now - supreme court ruled those out.

would like one not just for computer stuff but for Maple Syrup- understand that is a very well price fixed industry.

but SSD's going head to head with mechanical? only way is for mechanical's to increase price the way it is going now. we have not seen the real drop in price yet in SSD's that economy of scale should dictate- so what is keeping the price up?

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