Solid-state iPads, Other Tablet PCs Hitting HHD Shipments Hard

It’s obvious that NAND flash-loaded tablet PCs, including the new Apple iPad 2 that was introduced March 2, are causing serious concern in the market for makers of conventional netbook PCs.
With the iPad, Samsung Galaxy and a plethora of other Google Android touch-based devices ramping up their sales with genuine momentum, the Asuses, Acers, Lenovos, and Sonys of the world who focus on the HHD (hybrid hard drive) netbook market have to be getting nervous. Not to mention the HHD producers themselves.
Industry researcher IHS iSuppli reported March 2 that rising sales of tablet devices will contribute in a big way-but not totally-to a low-single-digit decline in HDD (hard disk drive) shipments for the first quarter of this year.
HDD shipments in the first quarter of 2011 are anticipated to reach 160.9 million units, down 3.9 percent from 167.5 million in the fourth quarter of 2010, IHS iSuppli said.
“Tablets like Apple Inc.’s iPad represent a major threat to HDD demand,” said Fang Zhang, analyst for storage systems at IHS.
“Among the various computing segments in which HDDs are used, the netbook, with lower computing capabilities than either a desktop or laptop, is considered the most vulnerable to being supplanted by tablets, which do not use hard disks as storage media. And as tablet adoption gains momentum, netbooks will suffer even greater declines,” he said.
On the solid-state-disk side, the NAND flash memory business will need to produce a huge amount more solid-state chips in 2011 over 2010 totals to cover production of some 80 new devices, IHS iSuppli reported earlier this month.
Consumption of the solid-state memory for processors used in the super-popular tablets is expected in 2011 to rocket to 2.3 billion GB. This represents a whopping 382.4 percent increase over 2010, said Dee Nguyen, analyst for memory and storage at IHS iSuppli.
The industry produced less than a half-billion GB of NAND flash-about 476.8 million GB-last year. Most of that capacity went into consumer smartphones, cameras and more than 10 million Apple iPads.
The need for NAND flash isn’t going to slow down anytime soon, iSuppli said. Shipments of NAND for tablets are on their way to a total of 12.3 billion GB by 2014, the analyst said.
Tablets Not the Only Factor
However, IHS iSuppli said, the contraction in HDD shipments is not entirely due to the impact of tablets, Zhang said.
Declines will occur in four of the six major segments driving demand for hard disks, including desktop PCs, notebook PCs, netbook PCs and consumer electronics, pulling overall figures down despite slight HDD increases in the enterprise business and the entry-level server segments, Zhang said.
The first quarter of every year is a slow period for HDD sales, Zhang said, and an oversupply of some 6 million to 8 million drives at the end of the fourth quarter is prompting a burn-off of excess inventory.
For the fourth consecutive quarter, Western Digital held off main rival Seagate Technology to claim the No. 1 spot in HDD shipments at the end of 2010, Zhang said.
Western Digital in the fourth quarter shipped 52.2 million HDD units, compared with 48.9 million for Seagate. In third place was Hitachi Global Storage Technology, which took some market share away from Seagate, with shipments at 30.3 million units.