History (1994): 125 Million Storage Units Sold WW in 1993, Up 13% From 1992, for $30 Billion

About 125 million storage units were sold worldwide in 1993, a 13 increase compared to 1992, for $30 billion at OEM price, almost steady. But most major manufacturers saw their great profits change into heavy losses.

This didn’t stop them from actively working on new products.

The example of Conner Peripherals, one of the leaders in magnetic disk and tape drives, is one of the most obvious ones. In the first 9 months of 1993, its losses reach $454 million, compared to $113 million profits in the 3 first comparable quarters of the previous year, even if it include restructuring charges and write-down of goodwill. In the same period, its sales dropped 3%. The rumor even spread that its founder, chairman and CEO Finis Conner, was going to leave.

The industry’s longest price war
Most other manufacturers also reported losses in one or another quarter last year, except a few including EMC, Seagate and SyOuest.

But globally, sales have nevertheless improved, around 6% for the main 6 independent manufacturers. More drives were even sold, but the price war between manufacturers took most of them into the red.

After a fair year in 1992, firms seriously increased their production capacity – the shelves were filled, so stocks had to be sold underproduction cost – or some plants had to be temporarily closed during the year.

According to Disk/Trend, prices of Winchester disk drives dropped an average of 28 to 55% depending on capacities.

Users turned out to always be the biggest winners in this deal. This price war – the worst and the longest in the entire industry history – and restructurings even drove some manufacturers to close their plants: IBM its Berlin (Germany) one, Conner the one in Ayr (Scotland), Digital Equipment the Kaufbeuren (Germany) one and make some drastic work force cuts.

Some almost sunk like Maxtor, rescued at the last minute by the Korean Hyundai that re-injected $150 million into the company.

Back to allocation
And now, as usual, we’re back in the opposite situation. Like for instance, it has been harder and harder to find 3.5-inch disk drives with less than 500MB for the past few weeks. We’re back to allocation. Manufacturers have not yet found the way to quickly adapt their volume production to the rapidly changing demand. Additionally, PC HDDs have become commodity products, having all about the same performance.

The OEM buyer doesn’t really worry about access times or transfer rates. He generally wants the cheapest price per megabyte and let competition strive only in this segment.

Record capacities in all form factors in Winchesters…
Despite financial problems, manufacturers did not skimp on R&D. Capacity records were beaten in all the form factors. Hewlett-Packard reaches 42.8MB in 1.3 inches, Integral Peripherals announces 170MB this year in 1.8-inch PCMCIA III, IBM 540MB in 2.5 inches, IBM, once more, 2.6GB in one-inch high 3.5 inches and 5.25GB full-height, finally Micropolis and Seagate close to 9GB in 5.25 inches.

One year ago, disk density topped at 260 million bits per square inch. IBM’s 5.25-inch unit, with the highest density, reaches 493 million bits in the same surface area, and even 594 million on its 3.5-inch disk with the greatest capacity.

And there is no reason for not exceeding these limits in the coming months, mainly on account of MR and PRML technologies. Big Blue even unveiled in its laboratories what it called “giant magneto resistance” that could lead, in a few years, to a phenomenal density of 10 billion bits per square inch, 30xs more than in actual products.

Removable HDD cartridge drives only represent a small part of the market but seem to attract users. They also attracted a newcomer, Avatar Systems. SyOuest, the sole player in the market until then, has made huge efforts with, mainly, its 60 or 80MB PCMCIA drive and another 3.5-inch one with a capacity that should reach 270MB. In the PCMCIA segment, Winchester disks rather than flash cards will keep the advantage for a long time for one single reason, a price difference favoring rotating memories.

… As in tape drives
Between the different formats (3480, DLT, QIC cartridges, QIC minicartridges, 4mm, 8mm), the fight is keeping on, which means the capacities are increasing also. We will soon only speak about gigabytes for magnetic tapes.

In 1994, some products should arrive, allowing us to store – without data compression – 20GB on 8mm, maybe 8GB on 4mm, 20GB half-inch on DLT cartridges, 13GB on quarter-inch cartridges, 2 GB on OIC minicartridges, 10GB on IBM 3480 type cartridges, with transfer rates varying from 500KB/s to 9MB/s.

Now, automatic robots for all these devices can be found.

Magnetic tapes are still far from gaining favor in the PC world, but they are included in almost all the storage network servers.

Optical disks jammed between magnetic tapes and disks
Optical disk sales are improving, but they are not really taking off except CD-ROM drives on account of the large offering in software, games, multimedia and Photo CDs.

Pioneer has managed to multiply the initial transfer rate of the drive by four, reaching 600KB/s.

Optical write-once disks or rewritable ones seem to be stuck between magnetic disks and tapes. Their performance is just between both of them, but with prices still too high.

In the 3.5-inch format, MOST reached a record of 384MB, the others stalling at 128MB. In the 5.25-inch format, everyone is turning to 1.3GB except Hitachi on top with 2GB.

To follow this year
It’s urgent to find something to replace floppy diskettes storing only 1.4MB. Will it be Sony’s MD Data, a 2.5-inch magneto-optical cartridge with 140MB that could also compete with 3.5-inch optical disks? Will it be the 21MB Floptical diskette with a half-optical, half-magnetic technology, or its next Japanese competitor with the same capacity but using a R/W technology entirely magnetic?

In 1994, we will also have to keep an eye on what the start-up Datasonix is developing, a tiny tape drive containing a 600MB cartridge the size of a stamp.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 72, published on January 1994.