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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  • Wolfpup - Thursday, July 14, 2016 - link

    No it isn't. 1TB is nothing if you're having to pull in this kind of data. Hell, a lot of new games are about 50GB a piece now. Reply
  • seerak - Monday, May 16, 2016 - link

    Or screwups like this one

    http://www.snopes.com/apple-music-deleting-files/
    Reply
  • Wolfpup - Thursday, July 14, 2016 - link

    Yeah, Comcast is rolling their caps out wider starting NEXT MONTH. They're the largest ISP, so.... Reply
  • will792 - Thursday, May 12, 2016 - link

    I have numerous friends with rapidly growing repository of video and image files (NEF files for Nikon D800 are 30-35MB each). Hard drives are the only realistic option to store multi terabyte libraries of created content that is typically mirrored and backed up. Proliferation of video created with GoPro or other action video cameras (including drone mounted cameras) will force consumers to buy hard drives since upload speed of typical Internet connection is too slow for upload of high resolution video content. Reply
  • Murloc - Thursday, May 12, 2016 - link

    at the end of the day, not a high % of people do that kind of stuff even though it's gotten more popular over the year.
    Just about everybody I know owns a laptop. If those increasingly come without HDDs but with SSDs, that's gone, RAW photographers or not.
    Reply
  • DanNeely - Thursday, May 12, 2016 - link

    In the medium term I wouldn't be concerned about disks for photography (or other bulk storage). The 3.5" HDDs best suited for USB drives/NASes are most similar to enterprise nearline storage drives; which as a segment dominated by cost/gb should be the most resilient part of the HDD market. Until/unless flash becomes cheaper per GB they're unlikely to go away.

    The short term situation of bottom end consumer drives being in freefall doesn't really matter beyond headline sales figures. The margin on those drives is near zero, so losing them doesn't affect the bottom line much (and that primarily from one time costs related to scaling down production capacity).

    I wouldn't worry until sales for 10/15k SAS drives start plummeting as well. They have the highest margins and fund an out-sized share of the R&D needed to develop higher capacity drives. When that goes away we'll either see a significant slowdown in capacity growth or rise in prices to sustain R&D spending (or both). That will probably be the beginning of the end for HDDs by making it much easier for flash to catch up in price/GB.
    Reply
  • tamalero - Tuesday, May 17, 2016 - link

    arent 10k 15k sas drives being replaced by SSDs in the corporate level? Reply
  • FunBunny2 - Thursday, May 12, 2016 - link

    yeah. what drove the first PC period was Word/Office at home, likely pirated from work. no one has ever had much need for more than 640K until the recent gaming fiasco. windoze bloated up, which drove it, too. but that has ended. we're now in the Times of Good Enough. Reply
  • Michael Bay - Thursday, May 12, 2016 - link

    >gaming fiasco
    >windoze

    Don`t forget to take your meds, please.
    Reply
  • Wolfpup - Thursday, July 14, 2016 - link

    <<< no one has ever had much need for more than 640K>>>

    (!) Uh... Are you in the right decade?

    And what's a "gaming fiasco"?
    Reply

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