Apple iPad sales slamming hard drive makers

Posted:
in iPad edited January 2014
The outlook for hard drive manufacturers is getting jolted by the popularity of Apple's iPad as the market wakes up to the reality that a significant segment of personal computers will no longer user mechanical hard drives.



New earnings reports from both Western Digital and Seagate Technology specifically cite tablets as being a risk to future sales, according to a report published by TickerSpy.



Seagate noted, for example, that its fiscal second-quarter results "tumbled by 72 percent due to slack demand for hard drives," the report said.



Bleak outlook for hard drives caused Seagate's stock to slide 7 percent, Quantum lost 6 percent, Western Digital dropped by 5 percent, while the entire Data Storage Stock index was down 2.9 percent.



iPad sales blast through the PC roof



Apple sold more than 7.3 million iPads in the last quarter of 2010, for a total of more than 14.7 million in its first three quarters on the market. "The demand has just been amazing and this is off to an incredible start," Peter Oppeneheimer, Apple's chief financial offer, said in yesterday's quarterly earnings conference call.



When asked when iPad supply would be able to comfortably meet demand, Apple's chief operations officer Tim Cook answered, "we honestly don't know," indicating that the company itself has been surprised by its initial sales.



Cook said that iPad is not following the typical early adopter curve. "We want to take full advantage of it, and so we are investing enormous time and resources in increasing our capability in getting iPad out to as many people as we can," Cook said.



Hard drive sector problems on the rise



Because the iPad uses flash storage memory similar to the iPhone and iPod touch, it doesn't need to include a conventional mechanical hard drive. Apple began shifting its iPod user base toward flash-based models with the iPad nano, and accelerated the trend with the flagship iPod touch that now makes up half of all iPods sold.



But it's not just sales of new iPods and iPads that are the knocking against the future of component demand growth in hard drives. Conventional PC form factors, and in particular notebooks and netbooks, are being eaten up by iPad sales in increasing numbers, both by consumers and in corporate circles.



Apple's chief executive Steve Jobs previously described iPad demand as its being "grabbed out of our hands" by business users.



Apple's ecosystem makes its own rain



Because most conventional PC products use hard drives, the growth of iPad at their expense is both depressing hard drive demand and creating excess supply, an issue that threatens to shift production and investment away from hard drive technologies and toward flash RAM storage.



In the meantime, Apple also benefits from more favorable component pricing in its devices that continue to use hard drives, including iMacs and most MacBooks, which are differentiated enough from iPad to prevent a cannibalization problem.



PC market analysts have, so far, sought to ignore the iPad even while celebrating the rise of netbooks in previous years. Recent reports on the PC market by IDC and Gartner bent over backward to avoid uttering "iPad," instead using "media tablet" as a polite euphemism for a force they had to admit was making a huge impact on PC sales, even as they both refused to include iPads into their definition of the personal computer market.



IDC has specifically invented three new tablet "markets," one for eReaders, one for so called "media tablets," and a third for conventional Tablet PCs running Microsoft's Windows.



This allows the company to isolate Apple's top selling device and pretend that it isn't part of either the PC market or even a narrower general tablet market, when iPad is actually, and uncontroversially, causing major upheavals in the PC market and dominating tablets of all definitions, from expensive Tablet PCs to $130 eReader devices sold at discounters.







This all happened before



A similar problem has already emerged for DRAM makers, who are seeing the growth in netbooks and notebooks (which often pack 4 GB of DRAM) dry up as the iPad replaces them with a design that includes less than 512MB of DRAM.



Apple benefits both from cheaper RAM commodity prices on its machines that use large amounts of RAM, while also being able to offer iPad at a cheaper price point because it doesn't require as much RAM as most competing tablets and low end netbooks running Windows 7.



Following in the steps of iPad, Apple has already released popular MacBook Air models that replace a conventional hard drive with a flash RAM SSD (Solid State Disk) module. Apple appears set to migrate other Mac products to SSD as well.



Last year, Apple also redesigned its slow selling Apple TV to take on a new iOS form factor that uses flash RAM storage, no hard drive, costs much less and is smaller. Sales have increased significantly since.
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Comments

  • Reply 1 of 39
    povilaspovilas Posts: 473member
    Traditional hard drives are here not for long.
  • Reply 2 of 39
    Once again drawing strangely unsupportable conclusions from disparate data. The iPad is not the only factor here.
  • Reply 3 of 39
    finetunesfinetunes Posts: 2,065member
    HDD's will still be here for those who need larger storage capacities in their computers. SSD's still don't have the larger capacities of HDD's and cost/GB is still hard to beat. The future for some may be in cloud computing resources for data storage.
  • Reply 4 of 39
    Quote:
    Originally Posted by Povilas View Post


    Traditional hard drives are here not for long.



    3.5" drives will be around for a while in server farms. 2.5" drives however, are doomed to extinction.
  • Reply 5 of 39
    zoetmbzoetmb Posts: 2,280member
    Quote:
    Originally Posted by Povilas View Post


    Traditional hard drives are here not for long.



    Depends upon how you define long. Until SSD's can come close to matching HD prices, HD will be here. While Apple might do something stupid and eliminate HD storage from future MacBooks, other manufacturers won't take that course.



    You can now get a name brand 2TB internal HD at physical retail for $125. A PNY SSD 128GB drive at physical retail is $255. 15x the storage at half the price. HDs will be around for awhile - 5 years is my guess.
  • Reply 6 of 39
    povilaspovilas Posts: 473member
    Quote:
    Originally Posted by zoetmb View Post


    Depends upon how you define long. Until SSD's can come close to matching HD prices, HD will be here. While Apple might do something stupid and eliminate HD storage from future MacBooks, other manufacturers won't take that course.



    You can now get a name brand 2TB internal HD at physical retail for $125. A PNY SSD 128GB drive at physical retail is $255. 15x the storage at half the price. HDs will be around for awhile - 5 years is my guess.



    I was thinking about something like 15 years. Consumer market that is.
  • Reply 7 of 39
    solipsismsolipsism Posts: 25,726member
    Are none of these HDD makers also making SSDs?





    Quote:
    Originally Posted by OllieWallieWhiskers View Post


    3.5" drives will be around for a while in server farms. 2.5" drives however, are doomed to extinction.



    I think for 2.5" drives of the same size SSDs are now a larger capacity than HDDs, and have been so for a good year. I don't see HDDs catching up. The next die shrinkage should half the cost for the same capacity this year and if assume the same again 18-24 years later we could only be a few short years before SSD is the only viable solution for notebooks. I made the switch last year and wil never go back.
  • Reply 8 of 39
    So they need to up production to meet demand.
  • Reply 9 of 39
    tjwtjw Posts: 216member
    What a joke. This is more down to SSDs incrementally replacing HDD. The ipad as a device is not responsible for this
  • Reply 10 of 39
    stompystompy Posts: 309member
    Quote:
    Originally Posted by OllieWallieWhiskers View Post


    3.5" drives will be around for a while in server farms. 2.5" drives however, are doomed to extinction.



    Interestingly, even the latest MBA represents "Macintosh HD" with the OS X hard drive icon. On the Air, the icon outlived the device.



    (That realistic icon has always seemed a little strange, since non-geeks wouldn't know or care what a hard drive looks like. Floppy / CD / DVD icons make sense, since the user actually handles them.)
  • Reply 11 of 39
    This can't happen fast enough as far as I'm concerned. SSD's have taken forever to get to a decent price point. I just priced one for my MBP and it's like $1400 from New Egg for a 512 GB. That's way too much, and I honestly need more space than that for photo and video. I hope these HD manufacturers see the writing on the wall and hurry up and drive the price down on these things.
  • Reply 12 of 39
    kotatsukotatsu Posts: 1,010member
    SSDs will surely win out in the end but it's going to be years. I just ordered a new 3tb external USB 3 drive just this evening. Cost me £150. How much would 3tb of SSD cost me?



    The economics don't make sense yet for anything other than ultra light use computing. Check back in 5 years.
  • Reply 13 of 39
    Quote:
    Originally Posted by AppleInsider View Post


    will no longer user mechanical hard drives.



    That's "use", not "user". Just sayin'.
  • Reply 14 of 39
    finetunesfinetunes Posts: 2,065member
    Quote:
    Originally Posted by solipsism View Post


    I think for 2.5" drives of the same size SSDs are now a larger capacity than HDDs, and have been so for a good year. I don't see HDDs catching up. The next die shrinkage should half the cost for the same capacity this year and if assume the same again 18-24 years later we could only be a few short years before SSD is the only viable solution for notebooks. I made the switch last year and wil never go back.



    I think that HDD's still have a slight edge in storage capacity. 9.5mm SSD 480GB @ $1580.00, Seagate 750GB 7200rpm 9.5 about $120.00.



    Bought a 17"ubMBP in 2009 with an Apple addition 256GB SSD still have room to spare and still fast. Would like to see TRIM in the next OS, but I think that we talked about this sometime ago. Eventually see MBP using the MBA solution of installing SSD options, however larger capacity drives are needed. Surprised that Apple didn't use the Toshiba 64GB chips which came out early 2010....guess cost and supply were a factor.
  • Reply 15 of 39
    Quote:
    Originally Posted by solipsism View Post


    Are none of these HDD makers also making SSDs?







    I think for 2.5" drives of the same size SSDs are now a larger capacity than HDDs, and have been so for a good year. I don't see HDDs catching up. The next die shrinkage should half the cost for the same capacity this year and if assume the same again 18-24 years later we could only be a few short years before SSD is the only viable solution for notebooks. I made the switch last year and wil never go back.



    I'm not aware of any off the HDD manufacturers making SSD's. SSD's is just chip making, and given the high cost to get into the high end of chip manufacturing, the barriers to entry are too high.



    I agree with you about the cost scaling. If anything Flash scaling is going to go ahead of what we've seen from Moores law in other devices due to the remarkable competition going on between Samsung, Toshiba, Hynix and IMFT.



    Having been given a laptop with an SSD when I started a new job six months ago, I really can see the end of HDD's in portable computers. Admittedly the SSD isn't as big as an HDD would be for the same cost, but it's big enough and the power and reliability benefits far outweigh the downsides.



    I think eventually we'll probably see HDD's only in data centers, though I wouldn't like to hazard a guess on how long that will take.
  • Reply 16 of 39
    noirdesirnoirdesir Posts: 1,027member
    Quote:
    Originally Posted by OllieWallieWhiskers View Post


    3.5" drives will be around for a while in server farms. 2.5" drives however, are doomed to extinction.



    Except that servers have started to slowly move to 2.5" drives as well. At least in some situations, having three 2.5" drives instead of one 3.5" drive can consume less energy (and thus require less cooling).
  • Reply 17 of 39
    noirdesirnoirdesir Posts: 1,027member
    Quote:
    Originally Posted by tjw View Post


    What a joke. This is more down to SSDs incrementally replacing HDD. The ipad as a device is not responsible for this



    In as much as the iPad as replaced netbook purchases, and there is a lot of evidence that it has to some degree, the iPad replaced the sale of HDDs to netbook makers with the sale of flash memory to Apple.
  • Reply 18 of 39
    Quote:
    Originally Posted by solipsism View Post


    Are none of these HDD makers also making SSDs?



    Nope.



    There has been a lot of consolidation in the hard disk industry over the past decade and now there are only three companies making hard drives: Seagate, Hitachi, Western Digital.



    None of them make SSDs to my knowledge.
  • Reply 19 of 39
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by FineTunes View Post


    I think that HDD's still have a slight edge in storage capacity. 9.5mm SSD 480GB @ $1580.00, Seagate 750GB 7200rpm 9.5 about $120.00.



    Bought a 17"ubMBP in 2009 with an Apple addition 256GB SSD still have room to spare and still fast. Would like to see TRIM in the next OS, but I think that we talked about this sometime ago. Eventually see MBP using the MBA solution of installing SSD options, however larger capacity drives are needed. Surprised that Apple didn't use the Toshiba 64GB chips which came out early 2010....guess cost and supply were a factor.



    Huh, 750GB HDD is the largest now. Somehow I missed that. I thought they still only went to 640GB in the 9.5mm height. I think Toshiba achieves this by putting 3, instead of 2, platters into the 9.5mm casing, not by increasing the amount of data per platter. Regardless of how they did it it’s an achievement.



    The 512MB SSD images don’t look like they have a spacer so they are the 9.5mm height, not the 7mm height standard. I thought they were 7mm with the 2.5mm spacer, which is an unstated assumption of my initial assumption as going with a 7mm HDD seems to be maxing out at 320GB. That, too, may still be more than SSDs that are 7mm.
  • Reply 20 of 39
    Can you say hybrid drives with some flash built-in like the "Momentus XT", and similar?! The rest of the market is way behind Seagate, apparently...
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