Featured Story: Peripheral Vision: When Will Emerging Hard Drive Technology Take Hold

Sunday, 29 April 2007 18:00

Peripheral Vision:  When Will Emerging Hard Drive Technology Take Hold

• More capacity – how much do we need?
• Who wants to spin?

2007 may mark the beginning of the end for traditional hard drives.  They won’t be gone tomorrow, but the writing is on the wall as solid state technology matures.  Remember when the only option you had to boot your computer was from a 5 ¼” or 3 ½” floppy?  You can still buy floppy drives today, but when was the last time you missed having one on your laptop?

The transition is underway – you can already buy laptops with solid state and hybrid disk drives (drives with both platters and on-board flash memory).  What does this mean for the storage market as a whole, and what should we expect in the coming months?

It’s a buyer’s market

There has never been a better time for OEMs and EMS providers to look for alternate sources for hard drives and expand the number of manufacturers on their AVLs.  Overall demand for hard drives has been soft for more than a year, and the price slide persists.

Recent introductions by Seagate and Hitachi of 750GB and 1TB drives respectively were lauded in the trade press as technological triumphs.  But rather than igniting demand, these new products only drove down pricing across the storage market. Hard drive prices have hit an all time low cost-per-gigabyte (GB); many notebook hard drives are selling for $0.60 to $0.80 per GB, and most desktop drives are priced between $0.25 and $0.35 per GB.

Perpendicular recording has allowed hard drive manufacturers to increase capacity in the same form factor, but other innovations are unlikely for the foreseeable future, so without increased demand, pricing is not likely to rebound.  The introduction of Microsoft Vista and the proliferation of high definition video have yet to achieve the sales volume needed to increase storage demands.

The future for traditional hard drives will likely be in high definition movie storage and mass storage on a large scale.  As solid state drives are more widely adopted as the storage medium of choice for laptops and PCs, traditional hard drive prices will continue to erode.

What’s the next step in storage?

The benefits of solid state drives (i.e. purely flash memory based) over traditional electromechanical hard drives are numerous and revolutionary:

This week Dell introduced two notebook models with options for solid state drives.  Dell’s upgrade cost is roughly $450 for the 32GB SSD over the traditional 60GB hard drive. 

Early adopters will pay a premium, but as flash memory technology matures, prices will drop as capacity increases.  The current maximum SSD capacity is 32GB, but Toshiba and Samsung have already released 16GB flash memory chips, so expect more rapid innovation in solid state technology.

Traditional hard drives may always be the best option for high capacity storage, but the technology that will get consumers’ attention in the near term won’t be rotational speed or capacity; but the rapid boot times and extended battery life they will enjoy through solid state storage.

Open Market Outlook

Hard drive pricing trends will continue downward throughout 2007, so buyers would do well not to tie themselves down to long term contract commitments.  Buyers should be aware of the steep discounts now available on most hard drives – for quantities as low as 2000-3000 pieces, customers can often name their price, and more often than not, manufacturers will agree to below market pricing.

Being on top of inventory levels and having accurate forecasted demand for current and upcoming builds will allow buyers to take full advantage of open market opportunities since current spot prices are trending below contract levels.

Leverage Smith’s expertise to assist in your purchase planning – contact your Smith account representative.

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