The Increasingly Attractive HDD Market · The Increasingly Attractive HDD Market: Will it Turn...
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www.idc.com The Increasingly Attractive HDD Market: Will it Turn Ugly? Dave Reinsel Director Storage Research [email protected] John Rydning Research Manager Hard Disk Drives [email protected]
Transcript of The Increasingly Attractive HDD Market · The Increasingly Attractive HDD Market: Will it Turn...
www.idc.com
The Increasingly Attractive HDD Market: Will it Turn Ugly?
Dave ReinselDirector Storage Research
John RydningResearch Manager Hard Disk Drives
AgendaAgenda
Record Breaking YearsUnits/RevVendorsHeads/Platters$/GB
The Technology Behind the RecordsTechnology BeforeTechnology After
IDC’s Outlook
Revenue Finally Breaks Previous Record!Revenue Finally Breaks Previous Record!
0
50
100
150
200
250
300
350
400
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
$0B
$5B
$10B
$15B
$20B
$25B
$30B
Units Revenue
$27.8B $27.9B(M)
HDD industry peaked in 1997 at just under $28B, then a 5-year slide in Revenue
2005 broke records for both units and revenue
2001 only year on record for decline in unit growth
Question is: Will it continue?
Vendor ConsolidationVendor Consolidation
050
100150200250300350400450
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
e
$0B
$5B
$10B
$15B
$20B
$25B
$30B
$35B
Units Revenue
(M)24 24 23 20 16 15 14 12 12 11 8 8 10 9 8
Major Acquisitions
1997 WW HDD Consumption by Platform1997 WW HDD Consumption by Platform
12%
11%77%
Enterprise Storage Desktop PCsLaptop PCs
Desktop PCs consumed nearly 99.6 million HDDsMobile PCs consumed around 15.2 million HDDsEnterprise storage solutions consumed nearly 14.5 millionCE applications were not even being counted at that point
N=129.3M
2005 WW HDD Shipments by Platform2005 WW HDD Shipments by Platform
20%
5%8%
52%
15%
Enterprise Storage Desktop PCsLaptop PCs CEOther
Desktop PCs consumed nearly 200 million HDDsMobile PCs consumed around 75 million HDDsEnterprise storage solutions consumed nearly 31 millionCE applications consumed 58 million drives‘Other’ drives (around 17 million) went into commercial applications and consumer or SOHO external storage
N=380.7M
WW HDD Consumption by PlatformWW HDD Consumption by Platform
12%
11%77%
Enterprise Storage Desktop PCsLaptop PCs
N=129.3M N=380.7M
1997 2005
20%
5%8%
52%
15%
Enterprise Storage Desktop PCsLaptop PCs CEOther
Nearly 3x
WW HDD Revenue by PlatformWW HDD Revenue by Platform
N=$27.8B
20%
5%
20%
42% 13%
Enterprise Desktop PCsLaptop PCs CEOther
N=$27.9B
1997 2005
12%
28%
60%
Enteprise Desktop PCsLaptop PCs
Nearly equal
Aggressive $/GB Erosion Aggressive $/GB Erosion
$0.1
$1.0
$10.0
$100.0
$1,000.0
$10,000.019
92
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
$/GB Erosion CAGR :-45% 1992-1997-51% 1997-2002-25% 2002-2007
Average desktop ASP and capacity
1992 - $230 for 120 MB2001 - $70 for 20 GB2005 - $50 for 80 GB
$1,900/GB
$200/GBWindows XP
$30,000/GBWindows 3.0
$0.81/GB Microsoft Windows1992 – Windows 3.0
– $150 for 5 MB2005 – Windows XP
– $299 for 1.5 GB
Storage RequirementsStorage RequirementsSampling of Windows Operating Systems
Windows OS Year Introduced Storage RequirementsWindows 1.0 1985 <1 MBWindows 2.0 1987 <1.5MBWindows 286 1988 1.7MBWindows 3.0 1990 5MBWindows 3.1 1992 8MBWindows 3.11 1993 10MBWindows 95 1995 55MBWindows 98 1998 315MBWindows 2000 2000 650MBWindows ME 2000 550MBWindows XP 2001 1,500MB
1993-2001 CAGR 89%
<30MB<30MB<30MB40MB
160MB340MB680MB3.2GB10GB10GB20GB
Sweet spot Desktop HDD
HDD Avg. Desktop Cap VS. Windows Storage RequirementsHDD Avg. Desktop Cap VS. Windows Storage Requirements
0
1
10
100
1,000
10,000
100,000
1,000,00019
85
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
MB
Avg. HDD into Desktop PCs
Approx. Windows OS Storage Requirements
Rapidly increasing delta relaxes pressure for higher capacity HDDs
Sweet Spot Drive Size vs. Heads/HDDSweet Spot Drive Size vs. Heads/HDD
0
20
40
60
80
100
120
Gig
abyt
es.
0
1
2
3
4
5
6
# H
eads
Sweet Spot 1.2 2.1 4.3 6.4 10.2 20 40 40 40 80#Heads to meet 4 4 4 4 2 2 2 1 1 2Avg. Heads/HDD 5.2 5.1 4.8 4.3 3.3 3.0 2.5 2.3 2.5 2.8
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Steady growth of sweet spot capacity until 40GB
Rapid AD growth enabled take down in components
Sweet spot HDD from 4 to 1 head
Avg. # Heads/HDD bottoms in 2003
Historical Technology TransitionsHistorical Technology Transitions
0.0001
0.001
0.01
0.1
1
10
100
1000
10000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Gb/
in2
25%
60%
100%
35-40%
MRNanoHeads
GMRPico
Heads
TuMR/PMR
sub-PicoHeads
AFCMedia
Component CountsComponent Counts
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
-4%
-2%
0%
2%
4%
6%
8%
10%
Heads 5.2 5.1 4.8 4.3 3.3 3.0 2.5 2.3 2.5 2.8Platters 2.7 2.6 2.5 2.3 1.8 1.6 1.4 1.3 1.4 1.5Op Mrg -1.7% 6.0% 1.5% 0.3% 2.9% 0.8% 5.5% 8.7% 2.5% 8.3%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Ave
rage
Hea
ds P
er D
rive
Source: IDC & Lehman Bros.Industry yields reach all time lows
Will the Industry Turn Ugly Again?Will the Industry Turn Ugly Again?IDC says no way
1. Component counts have bottomed and the same dynamics that caused the 1997 revenue waterfall should not re-occur
2. Component demand should outstrip supply at least through 2006
3. Manufacturing capacity is coming online moderately
4. Further consolidation will continue to help abate ASP erosion
5. Technology spending is likely to be focused on value add as opposed to AD to reduce costs
Maximum AD Vs. AD AdoptedMaximum AD Vs. AD Adopted
0
5
10
15
20
25
1Q96
3Q96
1Q97
3Q97
1Q98
3Q98
1Q99
3Q99
1Q00
3Q00
0
20
40
60
80
100
120
140
160
180
2Q01
4Q01
2Q02
4Q02
2Q03
4Q03
2Q04
4Q04
2Q05
4Q05
1996 - 2000 2001 - 2005Quick adoption of maximum AD in mainstream
Mainstream adoption of maximum AD reserved for niche or more profitable segments
Avg. GB/platter of desktop HDDs shipped
Maximum GB/platter available
GB/platter GB/platter
Avg. GB/platter of desktop HDDs shipped
Maximum GB/platter available
Technology Expands Market ApplicationsTechnology Expands Market Applications
PCs, Enterprise
Handheld devices
High Def PVRs
Video Surveillance
Automotive
Multimedia Apps
Where the TBs are GoingWhere the TBs are Going
0%
20%
40%
60%
80%
100%
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Significant trend is mix shifting away from traditional desktop PCCE and External Home storage (and consistent Laptop) displace Desktop PCEnterprise showing an increase due to SATA-based storageEnterprise
Desktop PCs
Laptop PCs CE
Ext.Home
A Positive Forecast, FutureA Positive Forecast, Future
0
100
200
300
400
500
600
700
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
$0B
$5B
$10B
$15B
$20B
$25B
$30B
$35B
$40B
$45B
Units Revenue
(M)
IDC is forecasting over 600M HDDs in 2009 and $40B in Revenue
Conclusions and RecommendationsConclusions and RecommendationsUnits and Revenue are on pace to break previous year records throughout the forecast period
HDD vendors do not need to ‘buy’ share, instead industry participants should be disciplined at increasing mfg. capacityComponent OEMs: Do not hesitate to install more mfg. capacity
Opportunity to focus R&D and technology integration on more value-add features (a diversion away from historical AD improvements)
Capacity growth for niche markets will be the main driver for AD growthValue-added features are more important than ever in order to differentiate productFuture technology transitions are difficult at best: Vertically integrate or partner strategically in order to ensure optimal yields and profitability
Never forget that CE is mostly about consumer ‘entertainment.’HDDs are not necessarily the culprit, but…more GB => more likelihood for increased complexity (features/software) => more potential for problems and problems will stall consumer adoption – hence Reliability/Robustness are king
www.idc.com
The Increasingly Attractive HDD Market: Will it Turn Ugly?
Dave ReinselDirector Storage Research
John RydningResearch Manager Hard Disk Drives
