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Data Storage Hardware

Hard Drive Revenue About To Take a Double-Digit Dip 269

Posted by Soulskill
from the coming-down-with-a-case-of-the-cloud dept.
Lucas123 writes "Ultrathin notebooks, smart phones and SSDs are all putting pressure on the hard drive market, which is set to take an almost 12% revenue loss this year, according to a new report from IHS iSuppli. Hard drive market revenue is set to drop to about $32.7 billion this year, down 11.8% from $37.1 billion last year. At the same time, In what appears to be a grim scenario, the optical disk drive industry is expected to encounter continued challenges this year, and optical drives could eventually be abandoned by PC makers altogether."
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Hard Drive Revenue About To Take a Double-Digit Dip

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  • Less demand (Score:5, Insightful)

    by fustakrakich (1673220) on Monday February 04, 2013 @07:22PM (#42791165) Journal

    That means prices will go down, right?

  • Re:Less demand (Score:5, Insightful)

    by 8ball629 (963244) on Monday February 04, 2013 @07:29PM (#42791243) Homepage

    That means prices will go down, right?

    We can only hope. Recently HDD manufacturers seem to be coming up with any excuse possible to increase the price per unit and I could see them increasing the price just to lessen the blow of decreased sales.

  • Re:ok then (Score:5, Insightful)

    by cheater512 (783349) <nick@nickstallman.net> on Monday February 04, 2013 @07:36PM (#42791335) Homepage

    Yes the burners are just starting to get affordable, but is it actually too late?

    Back in the days of 20gig hard drives and 128mb flash sticks, DVD burners were a god send.
    But now we are at 3TB hard drives and 64-128gig flash sticks plus 'cloud' storage which is better for long term archives.

    Is a measly 25gig single sided going to cut it when they are just starting to get affordable?
    Some people will buy them but I suspect every single computer will not have one like they used to with DVD burners.

  • Re:Less demand (Score:5, Insightful)

    by Githaron (2462596) on Monday February 04, 2013 @07:45PM (#42791453)
    I am more worried about traditional computers following this trend as the average Joe finds all his non-productive computer usage can be done on a tablet and gaming console. Power users, productive users, and PC gamers would left spending even more money on equipment than they already do.
  • Re:Less demand (Score:4, Insightful)

    by Jah-Wren Ryel (80510) on Monday February 04, 2013 @07:49PM (#42791493)

    That means prices will go down, right?

    That would probably be true in a competitive market.

    But right now the market for hard disks is between two giants (Western Digital and Seagate) and one tiny little division of Toshiba that doesn't make much if any 3.5" models. I think we are much more likely to see oligopoly-style non-competition and thus price stability if not outright increases.

  • Re:Less demand (Score:4, Insightful)

    by whoever57 (658626) on Monday February 04, 2013 @07:53PM (#42791531) Journal

    But right now the market for hard disks is between two giants (Western Digital and Seagate) and one tiny little division of Toshiba that doesn't make much if any 3.5" models

    And SSDs. The availability of drop-in replacements for spinning-disk hard drives alters the market dynamics. SSDs are a lot more expensive, but they also offer some big benefits: lower power, faster access. The availability of SSDs is likely to impact the price of spinning platters much more than the 2-supplier oligopoly.

  • It's deserved (Score:5, Insightful)

    by Anonymous Coward on Monday February 04, 2013 @08:12PM (#42791763)

    The market is punishing the Hard Drive creators for the fact they engaged in price gouging. The popularity of SSDs skyrocketed after hard drive manufacturers took advantage of several factories being disabled. Now that people like SSDs, the popularity of hard drives is permanently diminshed.

    Did you enjoy your short term gains without and long term goals? Hope you did. Bye bye in a few years, then!

  • Re:Less demand (Score:4, Insightful)

    by teh dave (1618221) on Monday February 04, 2013 @08:32PM (#42791957)

    And won't be missed.

    I will miss them. I still like optical discs, as they make an excellent WORM media (Write Once, Read Many). This makes them good for archival storage of files that aren't huge movies, like documents. A double layer BD disc holds 50GB, which is plenty for documents, config files, code, save games, even photos or moderate amounts of music. Just because you can't fit your entire torrented movie collection doesn't make them useless. You see, I can write a BD disc, and close it. I then know that nothing can write to it again (well, practically - how many people have BD burners, and mine won't anyway), which means it's safe to use in an untrusted (or potentially infected) system. Name a cheaper storage medium which has this capability.

    I also find many people dismissing optical media for movie and game distribution, and claim that these days it should all be distributed online. It must be nice to have a fibre Internet connection to your house, but back in the real world where everyone else lives the average Internet connection speed is still a couple of megabits, and that isn't improving very quickly at all. People like myself are stuck with a measly three megabits... you expect me to download a 20GB video game or a 40GB movie on that? I'd be waiting a week!

  • Re:Less demand (Score:2, Insightful)

    by Anonymous Coward on Monday February 04, 2013 @08:36PM (#42792005)

    Yes, but most people do not need a general purpose computer. You're been riding on the rather accidental alignment of "entertainment computing" and "general computing", because for the last few decades entertainment computing was demanding enough to require a heavyweight general PC. Now, special purpose devices like tablets are stepping in to fill that niche, so the result will be that general purpose computers become more expensive because they won't enjoy the economies of scale they have over the last few decades from the great masses buying them any longer.

  • by Tackhead (54550) on Monday February 04, 2013 @08:42PM (#42792073)

    250GB - $49.99 ($2.00 per 10 gigabytes)
    320GB - $59.99 ($1.87 per 10 gigabytes)
    500GB - $58.99 ($1.18 per 10 gigabytes)
    1TB - $79.99 ($0.80 per 10 gigabytes)

    I mean, don't get me wrong, the 1 terabytes are an attractive price on a price-per-gigabyte point of view. But there are times where you simply don't need (or want) a large drive, and a small one would do, or your budget for a larger one doesn't exist and you need a smaller drive. But the price per gigabyte is so out of whack on the low end models, it doesn't make sense to waste your money. You'd think stores and suppliers would want to dump their low end inventory for the larger capacities, but apparently they aren't in any hurry.

    There's more to a hard drive than the platters.

    What this pricing is telling you is that it costs about $30-40 to produce a hunk of machined aluminum, a controller board, a few connectors, some cache memory, a voice coil, a fancy motor, and a read-write head. And it costs about $5 to produce a platter, regardless of whether it was a 500GB/1TB platter that's only good enough to be used on one side, both sides of a 320MB platter, etc.

    The pricing curve for SSDs will have a very long-term advantage over spinning metal in that the costs of the "mechanical" parts of an SSD are negligible in comparison to the costs of a spinning disk. There'a a very real floor in HDD pricing, because there's a lot of things inside an HDD that don't store bits.

  • Re:ok then (Score:5, Insightful)

    by Kjella (173770) on Monday February 04, 2013 @08:54PM (#42792185) Homepage

    Not necessarily. R/W storage has always the risk that somebody accidentally deletes the archived files. HDDs can get damaged from mechanical shocks, flash products can die from ESD zaps. I still feel that the optical disc is the king of proper long-term storage.

    There's not much chance of accidentally overwriting a disconnected external HDD clearly labeled BACKUP either. I take it you've never tried to restore a large amount of data from optical media? I have and they do get unrecoverable CRC errors, but what's almost as bad is the read speed of old discs. My drive would spin up, down, read and re-read so a single disc could take an hour to read. Even on good discs I say you'd be lucky to restore 4 DVDs/hour, and it takes 200+ to restore a single 1TB HDD. And unless you have a disc robot that means you'll be glued to your computer for days changing discs every 15 minutes.

    If you want more security, the best way is more copies. With HDDs you could have triple backups with far less effort than making one DVD backup set. If you have the bandwidth make multiple online backups, don't trust one backup service. Of course in theory you could have supervirus wiping all your disks and logging into all your backup services and deleting all your files, but that's why you have a disconnected HDD. And if you're robbed blind or the house burns to the ground they'll all go unless you've taken one offsite, but your online backups will still be there. The chance of both on- and offline backups disappearing at the same time is practically none.

  • by Hadlock (143607) on Monday February 04, 2013 @09:17PM (#42792345) Homepage Journal

    The case alone costs about $12 to buy the raw materials, cast, and precision machine. The only difference between the 250GB and 1TB version is the number of platters, quality of platters and model of read/write heads. The profit margin on the 250GB is probably about 15%, just the same as the model with the high end 1TB platters & read/write heads. Eventually you run in to a price floor, which is based on the physical reality that the drive is made from high grade machined aluminum.

  • by Kjella (173770) on Monday February 04, 2013 @09:17PM (#42792353) Homepage

    There's more to a hard drive than the platters. What this pricing is telling you is that it costs about $30-40 to produce a hunk of machined aluminum, a controller board, a few connectors, some cache memory, a voice coil, a fancy motor, and a read-write head. And it costs about $5 to produce a platter, regardless of whether it was a 500GB/1TB platter that's only good enough to be used on one side, both sides of a 320MB platter, etc.

    And that's just the production, you still have the same costs on packaging, distribution, support, warranty returns etc. no matter if it's a 250GB or 1TB drive you're selling. I see the same thing here with for example broadband, there's a price floor just to operate a service to you no matter if the flow is a trickle or a torrent.

  • Re:Less demand (Score:5, Insightful)

    by hairyfeet (841228) <bassbeast1968@ g m a i l.com> on Monday February 04, 2013 @09:34PM (#42792511) Journal
    And THIS, this right here, is why their sales are falling. Before the flood I was getting 1TB drives at around $40 and 2TB drives for around $65 but since the flood prices have been close to double that so I simply haven't been buying. If the prices come down? Sure I'd be happy to add another couple of TB of storage, but I'm not gonna pay premium price just to add more space.
  • by Taco Cowboy (5327) on Monday February 04, 2013 @09:40PM (#42792569) Journal

    Not if you cut supply.

    In an open marketplace, where there are a lot of competitors, cutting supply would be a commercial suicide.
     
    But the hard drive business we have today is an oligopoly business. After the rounds of M&A there are less than 5 serious contenders in the HD manufacturing business.
     
    Cutting supply in such scenario has become a very possible option for the oligarchs.

  • by citizenr (871508) on Monday February 04, 2013 @10:16PM (#42792801) Homepage

    We are living in an Information Age. Do you honestly expect all of the Clouds to store Petabytes of data on SSD drives?

  • Re:It's deserved (Score:4, Insightful)

    by Rich0 (548339) on Tuesday February 05, 2013 @08:33AM (#42795439) Homepage

    Did you enjoy your short term gains without and long term goals? Hope you did. Bye bye in a few years, then!

    You say that as if the company has feelings. The company didn't enjoy anything, and will feel no pain when they collapse.

    The executives running the company, however, certainly enjoyed their hefty bonuses during the years they gouged the industry. They can just coast now until they get fired, and then retire to their private islands. I'm sure they've all learned their lessons.

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