SSDs Are Cutting into Hard Drive Sales

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by Andy Patrizio

With PC sales dropping and emphasis on portable devices, the hard disk drive market is going to see its first drop in years due to slower sales, and by a significant margin.

IHS, formerly iSuppli, estimates that the global hard disk drive (HDD) market revenue will decline in 2013 by about 12 percent this year and it will be flat to down slightly in the following year.

The reasons are many. Desktop sales, which can often contain multiple hard drives, are down. Ultrabooks are gaining some momentum but they use either SSD drives or hybrid drives, which combine some NAND flash memory as a large cache with an HDD.

SSD vs Hard driveThen there’s the fact that SSD drive prices are plunging. A 128GB drive starts at $99 on NewEgg while a 256GB drive starts at $199 and 512GB drives start at $399. IHS predicts NAND flash memory prices will continue to fall in 2013, and the drives will go even lower in price.

For some people, a 128GB drive is just fine, said Fang Zhang, analyst for storage systems at IHS. “If you’re a casual user you don’t need a lot of capacity. 128GB is enough for
grandma or whatever. They don’t need that much capacity,” she said.

But the 1TB drives creeping onto the market are still too expensive for most consumers, with their average price of $1,000. “That’s still too high for the majority of people. Storage cost should represent 13% of the total cost PC cost. A 1TB drive would cost more than the whole PC,” she said.

Zhang thinks there will be an explosion in hybrid HDDs this year like the Seagate Momentus XT, one of the first hybrid drives that came with 4GB of NAND flash plus 500GB of storage. Only these newer drives will have 8GB, 32GB and possibly even 64GB of flash acting as a huge cache.

It’s not a total loss for the HDD market. The business sector, including enterprise storage, cloud storage, big data and big-data analytics, will continue to grow and need their petabytes of storage. Western Digital is expected to launch a 5 terabyte HDD under the Helium brand targeting data centers for enterprise servers and storage applications, not your average home user.

One silver lining to the drop in sales is it will likely push down HDD prices. Zhang said hard drive prices still have not recovered from their massive spike in 2011 following the floods in Thailand that wrecked the factories for all of the hard drive makers and their component suppliers.

Pre-flooding, the price of a 500GB was between $35 and $40. Sometime this year it might get down to $40 but they still aren’t there yet, said Zhang.

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