Leading industry watchers like IDC and Gartner early this year predicted that the first quarter of 2016 would not be good for the PC industry and various companies agreed with that. The reasons for the declines are well known: global economic issues, the slowdown in China, the strong U.S. dollar as well as competition from smartphones and other devices. As sales of PCs were not strong as predicted, this negatively affected the hard drive market.

According to Gartner, PC shipments worldwide totaled 64.8 million units in the first quarter of 2016, a decrease of 9.6% from Q1 2015. The company notes that this was the first time since 2007 that shipment volume fell below 65 million units. Analysts from IDC are even more pessimistic because based on their findings, shipments of PCs in the first quarter totaled 60.6 million units, a year-over-year (YoY) drop of 11.5%. As we noted in our previous coverage of the HDD market earlier this year, the decline of HDD shipments in 2015 significantly outpaced the regress of the PC market. As it appears, the same happened in the first quarter of 2016 as the total available market of hard drives dropped to a new multi-year low.

Shipments of HDDs Total 99.8 Million Units in Q1 2016

Seagate, Toshiba and Western Digital, the three remaining producers of HDDs, shipped a total of 99.8 million hard drives in Q1 2016, or 20% less than in the same period a year ago according to their estimates (see counting methodology below). According to estimates from Nidec, the company that sells the majority of small precision motors for HDDs (over 80% of them, based on its own estimates), the industry sold 98 million hard drives in Q1, but it is worth noting that Nidec is typically very conservative. In the same quarter of last year, Seagate, Toshiba and Western Digital sold 125 million HDDs, whereas just six years ago the industry shipped 163 million units. In fact, even in Q1 2006, sales of HDDs totaled 101.7 million units, according to iSuppli (via EDN), which means that we might be talking about a 10-year low in hard drives shipments.

Sales of PCs in general (and hard drives in particular) are seasonally not strong in the first quarter of the year, which is why it is not surprising that they declined to around 100 million units from 115 million units in Q4 2015. What is alarming is that despite this seasonal change, Q1 2015 shipments of HDDs were higher than sales of hard drives in each of the remaining quarters last year. If this year follows the same negative pattern, then HDD shipments will be below 100 million units in the second quarter and will remain below that level in the second half of the year. Western Digital estimates that total available market (TAM) of HDDs will decline to 95 million units in the second quarter, which means a decline of around 15% from the same period last year. A moderately good news is that Western Digital seems to be optimistic about the second half and believes that HDD TAM will remain above 400 million units mark in 2016 (compared to 456 million units in 2015), which means that shipments of hard drives will grow in calendar Q3 and calendar Q4. IDC has asserted that inventory reductions, cautious buying and other additional elements of the equation that directly affected makers of components in the recent quarters are wrapping up, Western Digital’s optimism could well be justified.

Market Share: Seagate, WD and Toshiba Shipments
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  • tamalero - Tuesday, May 17, 2016 - link

    with the advent of netflix, I actually wonder if its worth expending that much on local storage with a plex/emby server running locally.
    Still, 4 tb drives are now reaching the 100 USD barrier. Which is hella cheap.
    You can easily buy a good array for what used to cost thousands.
    Reply
  • Wolfpup - Thursday, July 14, 2016 - link

    I don't save much video, but even still I keep some shows from my Tivo, and broadcast TV is a (glorious) 7.5GB/hour or so. And as someone mentioned, comics-I've got GB of stuff from Humblebundle. And we didn't used to have to store our games, since they actually bothered putting them on disc. I've long since surpassed what my 4TB drives can hold, and moved on to 8TB ones just for my games from GOG.com and Steam... Reply
  • Murloc - Thursday, May 12, 2016 - link

    some people systematically rip everything they buy, but it's home cinema audiophiles with projector kind of people. Very rare. Reply
  • bji - Friday, May 13, 2016 - link

    Nothing more disgusting than people who pirate things they don't even need just because they're so in love with the idea of hoarding pirated goods.

    Oh yeah and then they bitch about the cost of the hard drives that they use to store their pirated goods. Truly classy.
    Reply
  • DanNeely - Friday, May 13, 2016 - link

    If they bought the disk they're not pirating it. The pirates are the people renting disks from Redbox (or old Netflix) and ripping them. Reply
  • Arbie - Saturday, May 14, 2016 - link

    Why exactly is that disgusting? Does pirating something you don't need / won't use / wouldn't have bought hurt anybody at all? Seems like all it does is sell more hard drives. Maybe your post was facetious; if so you need to get a little better at that. Reply
  • Wolfpup - Thursday, July 14, 2016 - link

    Murloc specifically said *BUY*, not seal. I don't even feel like I buy that much anymore, but still have piles of CDs, DVDs, etc. Reply
  • mindless1 - Wednesday, February 15, 2017 - link

    "Nothing"? Really? I can think of thousands of things more disgusting, including your judgemental attitude and the stranglehold that certain content developers are provided in the US and their John Doe persecution of people they don't even have sufficient evidence of piracy against, despite reporting record profits then instead claiming massive piracy losses.

    Supporting those deceitful !@#$ is far more disgusting to me.
    Reply
  • Death666Angel - Thursday, May 12, 2016 - link

    "but I rarely have anyone ask about how to store even BR-D-quality video, so I'm skeptical that 4K will become a serious driver of increased household storage needs this decade. (At least at the consumer level.)"
    My guess is, people who need you to build them a rig or give them advice, aren't the sort of people into ripping movies in the first place. They are probably fine with tossing the blu ray into their player, hit play, watch it once and then put it in the attic. :D I'm waiting for a more serious shift in prices to get another bunch of 4TB drives for my fileserver (currently 2x[4x2TB] with at 7 more 3.5" bays empty).
    Reply
  • JoeyJoJo123 - Thursday, May 12, 2016 - link

    Except HDD prices haven't significantly changed in the last 2-3 years, following the normalization of prices after the floods.

    They don't seem to be changing anytime in the near future either; in fact, it may just go up as HDDs die off and exit the market.
    Reply

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