Excerpted from IDC Document #201478, "Worldwide Hard Disk Drive 2006-2010 Forecast: Record-breaking Years Lie Ahead."
Author: Dave Reinsel, Director Storage Hardware Research
The Industry in Aggregate
Calendar-year 2005 was a record-breaking year for the HDD industry from two perspectives: units and revenue. Surpassing the 2004 unit shipment record is no surprise, though the 24.4% increase to nearly 381 million drives surpassed all expectations. However, breaking the industry's old revenue record has received little attention. In 1997, the industry generated $27.8 billion in revenue. 2005 revenue came in at $27.9 billion, when rounded. It was close, but a record-breaker, nonetheless. This dynamic should not be overlooked given the difficult years the industry experienced immediately following 1997. Many question whether the same trend can happen again, but IDC sees the future in a positive light.
The component constraints that emerged late in 2004 lasted throughout all of 2005, especially with respect to glass and aluminum substrates. The limited supply of components coupled with manufacturing constraints among the HDD vendors created an environment of undersupply, moderate price declines, and unprecedented revenue growth.