Digital Gadgets Pump Up Demand For Disk Drives - InformationWeek

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Hardware & Infrastructure

Digital Gadgets Pump Up Demand For Disk Drives

Personal video recorders, portable music players and advanced cell phones are expected to account for a third of the hard-disk market by 2008.

Consumers storing digital music, video, and pictures will quickly accelerate the market for hard-disk drives, a market research firm said Tuesday.

As hard drives find their way in consumer electronics, the market for the storage hardware is expected to increase at a compound annual growth rate of 67.1 percent from 2003 to 2008, In-Stat/MDR said. In terms of units shipped, that's 500 million by 2008 from 265 million last year.

Consumer electronics today account for a small percentage of the hard-drive market, making up 5 percent in 2003. The CE segment, however, is expected to encompass a third of the market by 2008, In-Stat said.

Over the next couple of years, personal video recorders, which allow consumers to record TV programming for later viewing; and portable music players, such as the popular iPod from Apple Computer Inc., are expected to account for most of the growth of hard-disk usage in consumer electronics.

Heading closer to 2008, however, advanced cellular phones capable of taking pictures and video are expected to become an increasingly important driver.

Other examples of CE products expected to contribute to market growth are personal digital assistants, global-tracking devices, digital cameras, camcorders, and videogame consoles.

For devices like cellular phones, however, manufacturers will integrate hard-disk drives slowly to test consumer demand. Prices for micro-drives, which are an inch or smaller, also need to drop, and companies offering downloadable content on the Internet have to demonstrate successful, long-term business models.

"From an emerging product standpoint, some of those markets may take awhile for significant penetration of models with hard drives," In-Stat analyst Cindy McCurley said.

However, there's no question that consumer demand for digital storage will increase.

"People are collecting more and more digital content in the home PC," McCurley said. "It's only a matter of time before some of these other devices become popular."

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