History (1997): HDD Market Poised for Robust 1997

The HDD industry is preparing for strong growth in 1997, following on the 106 million units shipped worldwide in 1996, according to industry totals compiled by market research firm Trendfocus, Inc. (Palo Alto, CA).

American companies maintained a dominant 86% share of the market, but Japanese and Korean companies are challenging for market share.

Fueled by PC shipments, a strong upgrade market, and booming sales of network servers and workstations, the demand for disk drives is spiraling upward.

“Last year, the disk drive industry further solidified its electronics industry position, by providing more storage capacity at lower prices,” stated John Donovan, VP, Trendfocus. “No other technology has provided a more definable, cost-effective enhancement to computers like the disk drive.”

Average storage capacities skyrocketed last year.

“Entering 1996, the average desktop PC drive stored 875MB. At year’s end, the average capacity was 1.4GB, a 60+% improvement – at even lower prices than 875MB drives were sold,” added Donovan. “Unlike new processors or monitors, disk drives offer higher capacities and performance at steadily lower prices with each new gen.”

Industry-standard formats won out handily. 3.5-inch drives, the desktop PC standard, withstood a resurgent 5.25-inch effort. The same was true in the portable market. 2.5-inch drives dominated the portable storage market, and 3.0-inch drives were a nonfactor in 1996.

“But with at least 3 suppliers entering the 3.0-inch segment, 2.5-inch drives will be challenged in 1997,” added Donovan.

Removable HDDs, sold primarily by Iomega and SyQuest, posted outstanding gains in 1996. Aggressive marketing and lower prices will broaden demand for removable drives in the late 1990s.

Seagate regained the top market position via its acquisition of Conner Peripherals early last year. Quantum was the second largest supplier, but Western Digital made the most significant market share gain.

“But while US suppliers dominated, non-US suppliers made impressive gain,” stated Donovan. “Fujitsu, Toshiba, Samsung and others are investing and will challenge US suppliers across the product spectrum.”

“The 1997 outlook is very strong. PC growth will be stellar again in 1997, thanks to wider adoption of multimedia, large software suites and a healthy upgrade market. Storage demand from servers and workstations is booming, the convergence of the PC with entertainment is boosting storage needs,” said Donovan. “We expect the drive industry to grow even faster in 1997 to more than 130 million unit.”

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 109, published on February 1997.