History (1996): Record 27 Million HDDs Shipped in 3Q96

Trendfocus (Palo Alto, CA), a market research firm specializing in the computer systems, disk drive, and storage components industries, announced its CQ3 Quarterly Update of the Storage Demand Analysis System (SDAS) that the HDD industry shipped a 3Q96 record 27 million units.

The disk drive industry’s healthy performance was attributable to several factors.

• Primarily, PC shipments to commercial applications were stronger than anticipated in the summer quarter. Consumer demand remained weak.
• Second, although drive price erosion rates eased in the quarter, average prices were still down 6-plus percent. This helped stir OEM and aftermarket storage demand.
• Third, as user storage requirements maintained an upward spiral, the buy/supply matrix in the 1.0GB to 2.0GB range was in good balance.

John Donovan, VP of Trendfocus, explained that the industry’s third quarter performance is typically weak: “Stronger PC and server sales, combined with astute product planning and manufacturing execution by disk drive companies, caused better-than-anticipated performance and sets the stage for a good 4CQ. “PC and disk drive companies generally managed inventories quite well, so we are hopeful that the industries can accelerate through 4Q and into 1997 without an overhang of inventory.“

The disk drive market has shipped more than 77 million units thus far in 1996, slightly lower than early year expectations.

“We target the market to ship nearly 110 million drives in 1996, another 20-plus percentage growth year for the rigid disk drive industry,” added Donovan.

PC shipments, particularly those to the corporate channel, continue to grow at a healthy rate. Consumer PC sales have been disappointing in 1996, despite continued system price declines. Demand for portable PCs is strong, although screen availability and system pricing are hampering sales.

The average disk drive capacity in a PC surpassed 1.2GB.

Server sales are booming, providing good incremental opportunities for disk drive companies. Average drive capacity in the server marketplace reached 2.5GB in the quarter.

Disk drive pricing continued to erode in 3Q96, but at a milder 5% to 8% rate. This is in contrast with rapid quarterly erosion of 10% to 14% experienced earlier in 1996.

Seagate remained the unit shipment leader in disk drives, but Quantum, Western Digital, IBM, Maxtor, Toshiba and Fujitsu all posted strong sequential gains in unit sales.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 107, published on December 1996.