Hard-drive industry shows continued growth

23 Jul 2008 08:08

Eleven percent more hard disk drives will be shipped this year than last, despite the increasing popularity of solid-state drives, says iSuppli

Despite industry leader Seagate's poor results earlier this year, analysts have said there is still plenty of demand for hard disk drives.

In the first quarter of 2008, hard-disk-drive (HDD) vendors shipped 137 million drives, 21 percent more than in the same quarter the year before, according to market research company iSuppli. Those drives are primarily inside notebook PCs, other portable devices, desktops and external drives.

Seagate reported its earnings in April, and revenue was below what analysts were expecting. However, demand for HDDs wasn't the issue, according to iSuppli.

"Seagate's second-quarter net income did come in lower than expected, but this was not because of any decline in demand, but rather due to lower prices for its products," according to Krishna Chander, iSuppli's senior analyst for storage systems.

Vendors like Seagate can charge more for HDDs for notebooks than they can for desktops, and, although desktop PCs shipments are down, notebook sales are doing very well. Last week, IDC and Gartner revealed data indicating that the worldwide PC industry is growing at a healthy rate, despite economic uncertainty in the US.

The iSuppli report states that demand for traditional magnetic drives is still strong, despite the advancement of flash-based solid-state drives (SSDs). Vendors are on track to ship 573 million drives by the end of this year, which represents 11 percent growth over last year's final tally, said iSuppli.

Lower prices and larger capacities are keeping HDDs competitive in the face of the increasing popularity of SSDs. Though NAND flash memory will also continue to get more affordable, iSuppli said traditional hard drives will maintain their lead for now.

Story URL: http://news.zdnet.co.uk/hardware/0,1000000091,39451557,00.htm