Hard Drive Revenue About To Take a Double-Digit Dip

Lucas123 writes "Ultrathin notebooks, smart phones and SSDs are all putting pressure on the hard drive market, which is set to take an almost 12% revenue loss this year, according to a new report from IHS iSuppli. Hard drive market revenue is set to drop to about $32.7 billion this year, down 11.8% from $37.1 billion last year. At the same time, In what appears to be a grim scenario, the optical disk drive industry is expected to encounter continued challenges this year, and optical drives could eventually be abandoned by PC makers altogether."

Comments

Less demand

[fustakrakich]

That means prices will go down, right?

Re:Less demand

[8ball629]

That means prices will go down, right?

We can only hope. Recently HDD manufacturers seem to be coming up with any excuse possible to increase the price per unit and I could see them increasing the price just to lessen the blow of decreased sales.

Re:Less demand

[Jah-Wren Ryel]

For a hint of where the market for spinning drives is going, look at DLP.

For anyone else going WTF do projectors and televisions have to do with storage, he's actually talking about DLT - Digital Linear Tape which is the marketing name of the Quantum tape product originally developed by DEC. The competing format is LTO (Linear Tape-Open) which basically killed DLT circa 2005. HP, IBM and eventually even Quantum (after acquiring Seagate's tape division) make LTO products.

It's deserved

[Anonymous Coward]

The market is punishing the Hard Drive creators for the fact they engaged in price gouging. The popularity of SSDs skyrocketed after hard drive manufacturers took advantage of several factories being disabled. Now that people like SSDs, the popularity of hard drives is permanently diminshed.

Did you enjoy your short term gains without and long term goals? Hope you did. Bye bye in a few years, then!

Re:Low end drives are too expensive

[Tackhead]

250GB - $49.99 ($2.00 per 10 gigabytes)
320GB - $59.99 ($1.87 per 10 gigabytes)
500GB - $58.99 ($1.18 per 10 gigabytes)
1TB - $79.99 ($0.80 per 10 gigabytes)

I mean, don't get me wrong, the 1 terabytes are an attractive price on a price-per-gigabyte point of view. But there are times where you simply don't need (or want) a large drive, and a small one would do, or your budget for a larger one doesn't exist and you need a smaller drive. But the price per gigabyte is so out of whack on the low end models, it doesn't make sense to waste your money. You'd think stores and suppliers would want to dump their low end inventory for the larger capacities, but apparently they aren't in any hurry.

There's more to a hard drive than the platters.

What this pricing is telling you is that it costs about $30-40 to produce a hunk of machined aluminum, a controller board, a few connectors, some cache memory, a voice coil, a fancy motor, and a read-write head. And it costs about $5 to produce a platter, regardless of whether it was a 500GB/1TB platter that's only good enough to be used on one side, both sides of a 320MB platter, etc.

The pricing curve for SSDs will have a very long-term advantage over spinning metal in that the costs of the "mechanical" parts of an SSD are negligible in comparison to the costs of a spinning disk. There'a a very real floor in HDD pricing, because there's a lot of things inside an HDD that don't store bits.

Hard Drive business is an oligopoly business

[Taco Cowboy]

Not if you cut supply.

In an open marketplace, where there are a lot of competitors, cutting supply would be a commercial suicide.
 
But the hard drive business we have today is an oligopoly business. After the rounds of M&A there are less than 5 serious contenders in the HD manufacturing business.
 
Cutting supply in such scenario has become a very possible option for the oligarchs.