SAN FRANCISCO--Global sales of hard disk drives (HDDs) are expected to decline by about 12 percent this year and decline further in 2014, according to market research firm IHS iSuppli.
As consumers turn their attention away from traditional PCs to tablets, smartphones and new-age type of PCs with solid state drives (SSDs), HDD revenue is projected to slip to about $32.7 billion in 2013, down from $37.1 billion last year. Sales of HDDs are projected to further slip to $32 billion in 2014, IHS said.
"The HDD industry will face myriad challenges in 2013," said Fang Zhang, analyst for storage systems at IHS, in a statement. "Shipments for desktop PCs will slip this year, while notebook sales are under pressure as consumers continue to favor smartphones and tablets. The declining price of SSDs also will allow them to take away some share from conventional HDDs."
HDD gross and operating margins are also likely to decline as a result of continued price erosion, IHS said. But Zhang said HDDs will continue to be the dominant form of storage this year, "especially as demand for ultrabooks picks up and hard drives remain essential in business computing."
IHS said it expects HDDs to continue to dominate the storage market because of their cost advantage relative to SSDs. HDD costs and pricing are significantly lower than SSDs, IHS said, with HDD average selling prices expected to decline a further 7 percent in 2013.