Hard days ahead for hard drives

Posted by Nermin Hajdarbegovic

Outfits don’t seem to be gobbling up nearly as many hard drives as they should. According to consultancy firm Futuresource, shipments have gone from bad to worse over the past two years.

The total capacity purchased last year dropped year-on-year for the first time in history and there are no signs of recovery yet.

A multitude of factors contributed to the slump. The disastrous Thailand floods in 2011 pushed prices up for several consecutive quarters, and just as supply started to improve, the tablet craze and PC slump hit hard, compounded by the ever increasing popularity of cloud services. The fact that SSD prices are tumbling did not help, either. Hard drive shipments peaked in 2010, with 28.1 million units, but they dropped to 25.9 million in 2011 and 21.5 million in 2012.

Mats Larsson, senior market analyst for Futuresource, told The Guardian that he doesn’t expect the market to recover to 2010 levels anytime soon.

"We think this year shipments will show between 5% to 10% growth - likely about 7%," Larsson said. So although some growth is expected, it’s not nearly enough to come close to 2010 levels.

The other issue is the size of drives purchased last year. While it is still growing, it is not keeping up with the drop in unit sales. As a result, the total capacity dropped from 25.4 petabytes in 2011 to 23.6 petabytes in 2012.

Larsson said some retailers held back on buying drives last year, in the hope that distributors would drop prices. That didn’t happen. Hopes that increased demand for tablets would result in higher NAS shipments were also quashed. Shipments of NAS systems in 2012 dropped to 1.12 million units, down from 1.27 million units in 2011.