PC Market May Slow Down Due to Low HDD Demand

HDD Prices decreased by 2% on average in the second quarter

By on August 3rd, 2010 13:24 GMT
For the most part, reports regarding the financial situation of individual companies and entire market segments in the second quarter were quite promising. PC shipments grew by a large margin compared to 2009, and companies even recorded all-time highs when it came to revenues and income. On the other hand, some segments did not perform as well as they could have, and the hard disk drive market may have more far-reaching consequences than others.

Apparently, the second quarter marked a decline in demand for HDDs. Western Digital managed to top Seagate by selling 800,000 more units in the first quarter and three million more in the second. During the May-June period, WD shipped about 19.9 million mobile drives, quite a few more than the 16.9 million of Q2 2009. Nevertheless, even despite such individual successes, the overall market for HDDs, according to reports, still declined by 4% sequentially, while prices dropped 2% on average. This may actually impact negatively on the PC market.

"In a May 13, 2010 release we stated that the mobile hard drive market, which is Western Digital's strength, will outperform the desktop PC market, which is Seagate's strength, in 2010. That's one of the factors in our forecast that Western Digital will move ahead of Seagate in 2010," added Castellano. "Shipments for the first half of 2010 further substantiate our forecast."

"The worldwide PC market was up 25% in the first half of 2010 over the same period in 2009," noted Robert Castellano, president of The Information Network. "Looking further down the supply chain, hard drive shipments in the second quarter of 2010 were down 4% sequentially but up 23% from the second quarter of 2009. There were several factors in the drop: weakness in Europe, destocking by PC customers, and a shift in ordering patterns by PC vendors as they took advantage of lower cost sea versus air freight."

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