HDD industry to see record revenue as shipments return to normal

The hard disk drive industry faced a rocky start to the year, with shipment numbers down as companies continued to deal with the aftermath of last fall’s devastating Thailand floods. Consumers have also been hit hard thanks to inflated HDD price tags, even at popular online shops. According to research group IDC, some normalcy should return later this year. Prices will drop, and shipments will rise. We’ve heard it all before, but hearing it again doesn’t hurt.

HDD industry to see record revenue as shipments return to normal

One of the more surprising notes from IDC’s forecast is that while total 2012 shipment figures will increase 7.7 percent over last year, revenue growth will actually be higher. An industry precedent, claims the group, and one built on months of higher-than-average HDD prices.

“In many respects, the hard disk drive industry has collectively hit the ‘reset’ button,” said John Rydning, HDD research vice president, IDC. “A reset of the HDD industry structure should allow for the remaining HDD industry participants to slowly reduce HDD prices from current levels at a rate that still delivers value to customers, while at the same time ensuring sufficient funding is available to develop new HDD technologies that are needed to improve HDD capacity, performance, reliability, power consumption, and security.”

A quick check of online HDD tracker Camelegg reveals that price downturn has already begun. A 1TB Seagate Barrcuda fell from around $140 in February to $100 this month. Of course, just weeks before floods crippled Thailand factories and disrupted companies’ supply chains, the product was only $50. Western Digital’s 1TB Scorpio Blue HDD dropped from a sky-high $230 last December to a more reasonable $130 in February. Its lowest price was $100 last summer.

Rydning and co. believe HDD makers will shift resources to hybrid drives as revenue from traditional PC products begins to dwindle. A separate report speculates that should ultrabooks take off and replace standard notebooks, companies will have no choice but to focus on hybrid drives. Seagate has already hit a milestone with its Momentus XT hybrid HDD, announcing last August that it had shipped one million units of the device.