History (1999): +4% for High-Capacity FDD Revenue in 1998

In a recent bulletin, Worldwide Removable Magnetic Storage Market, Year in Review and 1999 Forecast, IDC estimates 1998 WW low end (i.e. Zip, SuperDisk and HiFD) OEM revenue increased by 4% to $707 million.

Respective high end (i.e. Jaz, SparQ and SyJet) OEM revenues decreased 2% to $297 million in 1998.

“Despite strong unit growth in both segments, high end OEM revenues declined in 1998 largely because of price reductions taken to hold on to share. More new product offerings in the low end, including Sony’s HiFD and Zip 250, helped to increase low end revenues. However, the high end instead suffered from a series of consolidations,” says Robert Amatruda, senior analyst for IDC’s storage mechanisms research group.

86% for Zip
The WW low end removable magnetic storage market comprises high capacity floppy-like storage devices that use flexible magnetic storage media in the cartridges. The low end segment increased units by an estimated 55% over last year to 12 million in 1998.

Due to its extremely large installed base, Iomega’s Zip dominates the low end removable magnetic market. Iomega and its partners NEC and MCI hold an estimated 86.2% share, which represents 9.9 million units at the close of 1998.

Strong growth in the low end removable magnetic storage market will continue in the year ahead.

Low end drives now offer increased capacity, ease of use and large feature sets that will make it a popular choice for most desktop and mobile storage applications.

Declining OEM prices will accelerate the adoption of this technology as a standard feature on more PCs. 61% for Jaz High end removable magnetic storage market comprises removable rigid disk technology. This includes !omega’s Jaz drive and SyQuest’s SparQ drive.

The WW high end removable magnetic storage shipments increased by an estimated 18% to 1.6 million units in 1998. However, this was below the 34% annual increase in 1997.

Iomega dominated the high end removable magnetic storage market and launched the new Jaz 2 drive in 1998. Its share at year-end 1998 remained stable, increasing by 1% to 61%.

SyQuest has upped its share to 37% from 29% in 1997, gaining share at the expense of Nomaï and Avatar with its low cost SparQ drive. Despite the early success of SparQ, SyQuest found it extremely difficult to support the low drive and media prices without having high volumes, and thus closed operations at the end of 1998.

While the high end removable storage market experienced growth in 1998, IDC believes that it will continue to service a smaller group of users than the low end removable magnetic market. Restrained growth is partly due to over capacity in the HDD market which drove down fixed HDD costs substantially.

High price points continue to limit the broad acceptance of this segment, with most drives sold through the aftermarket. The high end will instead stay after-market focused and continue to have little OEM support.

Nonetheless, the report expects that the high end will be an excellent solution for expanded primary storage of large data sets, specifically graphics files, audio, full-motion video and presentation files. Additionally, with their unmatched performance, high end devices will remain viable with new re-writable DVD formats.

This article is an abstract of news published on issue 134 on March 1999 from the former paper version of Computer Data Storage Newsletter.