Rigid disk drive market Quickens

Electronic News, July 1, 1996 by Cynthia Bournellis

Monterey, Calif.--Brace yourselves. The storage market is booming. Shipments of disk drives alone last year were 87 million units, a hefty 26 percent increase over 1994, according to market researcher Dataquest. Shipments are expected to grow from over 100 million units this year to more than 200 million units by the end of the decade.

By then, the number of rigid disk drives expected to ship per every computer sold is 1.6. This increase will be caused in part to the growing uses of Quicken financial software and online stock quotes, said Brad Smith, manager of the document management group at Dataquest, at the StorageTrack 1996 conference last week. "These factors forced users to upgrade their PCs or purchase new ones last year."

According to Mr. Smith, the next phase of growth in the PC and storage industries will be manipulated by Intel's Pentium multimedia instruction set (MMX) processor. The Pentium MMX market is expected to kick in next year. Also making headway is removable storage. For instance, shipments of Iomega Zip drives will exceed 7 million units by the end of the year, at an appealing consumer price point of $199.

"New OEM success for Zip indicate a potential market change from legacy floppy products," said Dataquest analyst Phil Devin. Other areas of growth include removable rigid cartridge drives, as the size of graphics files increases. And, the disk drive after-market will become an attractive business for all hardware platforms ranging from mobile computers to supercomputers.

In the tape drive arena, expect to see some technical advances. For example, minicartridge capacities will expand and will compete with 4 millimeter, 8mm and 5- 1/4-inch data cartridges. By next year, 3M Travan technology and QIC-EX from Verbatim will dominate the market. And new devices from Sony, Ampex and Storage Technology based on helical scan technology will penetrate the market.

The future of optical storage will ultimately lead to digital versatile disk (DVD) technology, thus becoming important to the PC industry. Why? DVD will appeal to consumers. Hollywood will become an early adopter of DVD, as the movie industry will want to use DVD in order to reduce materials and inventory costs of magnetic tape distribution.

While exciting changes are expected to take place in the storage market, some things will remain the same: costs per megabyte will continue to decline, corporate consolidations will continue to occur and demands for increased capacity will continue to rise.

In a keynote speech by Michael Brown, CEO of Quantum Corp., Mr. Brown said partnerships will be crucial in order for storage vendors to become preferred vendors over the next millennium. Mr. Brown noted his company's 12-year relationship with Matsushita-Kotobuki Electronics Industries, a maker of hard disk drives for PCs, portable computers, servers and workstations.

He said the partnership has helped Quantum improve its time-to-market. The model implemented by both companies works, because "we have complementary competencies, vertical integration and a similar perspective when it comes to winning over the long term", noted Mr. Brown.