iPads and other tablets help depress HDD shipments

EL SEGUNDO, USA: Rising sales of tablet devices coming at the expense of conventional netbook PCs will contribute to a low single-digit decline in shipments of hard disk drives (HDDs) for the first quarter of this year, according to new IHS iSuppli research.

HDD shipments in the first quarter of 2011 are anticipated to reach 160.9 million units, down 3.9 percent from 167.5 million in the fourth quarter of 2010.

“Tablets like Apple Inc.’s iPad represent a major threat to HDD demand,” said Fang Zhang, analyst for storage systems at IHS. “Among the various computing segments in which HDDs are used, the netbook—with lower computing capabilities than either a desktop or laptop—is considered the most vulnerable to being supplanted by tablets, which do not use hard disks as storage media. And as tablet adoption gains momentum, netbooks will suffer even greater declines.”

However, the contraction in HDD shipments is not entirely due to the impact of tablets.

Declines will occur in four of the six major segments driving demand for hard disks, including desktop PCs, notebook PCs, netbook PCs and consumer electronics, pulling overall figures down despite slight HDD increases in the enterprise business and the entry-level server segments.

Furthermore, the first quarter of every year is a slow period for HDD sales, and an oversupply of some 6 million to 8 million drives at the end of the fourth quarter is prompting a burn-off of excess inventory.

Companies continue to duke it out
For the fourth consecutive quarter, Western Digital Corp. held off main rival Seagate Technology to claim the top spot in HDD shipments at the end of 2010. Western Digital in the fourth quarter shipped 52.2 million HDD units, compared to 48.9 million for Seagate, whose distribution channel in the Asia-Pacific region weakened during the last few weeks in the fourth quarter last year. Holding at third place was Hitachi Global Storage Technology, which took some market share away from Seagate with shipments totaling 30.3 million units.

Both Western Digital and Seagate saw prices erode in the fourth quarter, resulting from PC manufacturers delaying orders because of excess inventory.

Source: IHS iSuppli, USA.