Tablet Popularity Contributes to Lower HDD Sales

IHS iSuppli announced that, according to its latest research, rising tablet sales will contribute to a decline in hard disk drive shipments in the first quarter of this year.

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Unedited press release follows:

iPads and Other Tablets Help Depress Hard Disk Drive Shipments

El Segundo, Calif., March 2, 2011—Rising sales of tablet devices coming at the expense of conventional netbook PCs will contribute to a low single-digit decline in shipments of hard disk drives (HDDs) for the first quarter of this year, according to new IHS iSuppli research.

HDD shipments in the first quarter of 2011 are anticipated to reach 160.9 million units, down 3.9 percent from 167.5 million in the fourth quarter of 2010.

“Tablets like Apple Inc.’s iPad represent a major threat to HDD demand,” said Fang Zhang, analyst for storage systems at IHS. “Among the various computing segments in which HDDs are used, the netbook—with lower computing capabilities than either a desktop or laptop—is considered the most vulnerable to being supplanted by tablets, which do not use hard disks as storage media. And as tablet adoption gains momentum, netbooks will suffer even greater declines.”

However, the contraction in HDD shipments is not entirely due to the impact of tablets.

Declines will occur in four of the six major segments driving demand for hard disks, including desktop PCs, notebook PCs, netbook PCs and consumer electronics, pulling overall figures down despite slight HDD increases in the enterprise business and the entry-level server segments, as shown in the attached figure.

Furthermore, the first quarter of every year is a slow period for HDD sales, and an oversupply of some 6 million to 8 million drives at the end of the fourth quarter is prompting a burn-off of excess inventory.

Companies continue to duke it out
For the fourth consecutive quarter, Western Digital Corp. held off main rival Seagate Technology to claim the top spot in HDD shipments at the end of 2010. Western Digital in the fourth quarter shipped 52.2 million HDD units, compared to 48.9 million for Seagate, whose distribution channel in the Asia-Pacific region weakened during the last few weeks in the fourth quarter last year. Holding at third place was Hitachi Global Storage Technology, which took some market share away from Seagate with shipments totaling 30.3 million units.

Both Western Digital and Seagate saw prices erode in the fourth quarter, resulting from PC manufacturers delaying orders because of excess inventory.

Learn more about the latest developments in the storage industry with the IHS report entitled: Hard Disk Drive Manufacturers Expect Seasonal Slowdown in Q1.

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About IHS (www.ihs.com)
IHS (NYSE: IHS) is a leading source of information and insight in pivotal areas that shape today’s business landscape: energy, economics, geopolitical risk, sustainability and supply chain management. Businesses and governments around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 4,400 people in more than 30 countries around the world.