80GB disks for desktop PCs likely in two years

Standard desktop PCs will come with 80GB of hard disk storage within two years, and portables will have around 35GB capacity, analysts have told the International Disk Drive Equipment and Materials Association (IDEMA) in Singapore.

Other trends noted by speakers include the development of microdrives for PDAs; a blurring of the distinction between high-end IDE PC drives and small server SCSI drives; and a shake-up in the balance of market share power between disk drive vendors.

Speaking to industry executives at IDEMA's Diskcon Asia-Pacific conference, Jim Porter, founder of analyst firm Disk/Trend, said that technical advantages would continue to deliver 60 per cent annual improvements in storage density for the next five years.

"By the year 2001, we'll be seeing 3.5in disks storing 80GB at the same price as today's mainstream drives," he said. "We can probably keep up this rate of increase for about five years more before running into the limits imposed by physics."

The increases in storage would be used in applications such as audio and video downloads from the Internet, imaging, and speech recognition in business applications, Porter said.

Mark Geenen, president of TrendFocus, a Palo Alto, California-based market research firm, said that capacities in all three areas of concern to disk drive manufacturers -- servers, desktop, and portables -- were rising quickly, but that manufacturers should concentrate on the core PC market.

"We're in the PC business and that is going to be the case until at least the year 2001," he said. "There's no lifesaver coming this year from the software industry that is going to dramatically boost demand for storage."

Geenen said that price erosion, which battered the disk drive industry in 1998, would continue at a slower pace.

"We saw brutal price drops of up to 20 per cent in 1998, which crippled some of the companies in our business," he said. "I don't think 1999 will be that bad, and we also expect a 17 per cent increase in unit drive shipments this year to 168 million drives."

But competition will remain fierce in the industry, and further consolidations and job losses are likely, the analysts told IDEMA.

"Major hard disk drive products have evolved into standardised formats with highly predictable development patterns and short product life cycles," said Disk/Trend's Porter. "Competitive forces will continue to eliminate the less effective drive manufacturers, as happened last year."

Analysts agreed that the three market share leaders -- Seagate Technology, Quantum and Western Digital -- had all lost market share to their closest competitors IBM, Maxtor, Fujitsu and newcomer Samsung Electronics over the last few years. In 1994, the top three held 70.3 per cent of the hard disk drive market, but only 59.3 per cent in 1998, according to Disk/Trend figures.

"There is a huge change happening in the power base in this industry," said Geenen at TrendFocus. "You can be a winner today and a loser tomorrow. You've got to be cheap, flexible and fast. There will be further consolidation, but I believe the disk drive industry will grow and prosper in the long run."

IDEMA can be found on the Web at http://www.idema.org

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