14 DAY TRIAL // Flash memory has been gaining headway in the storage segment and solid state drives are already being adopted in all kinds of products. While this might mean that HDDs might eventually begin to lose ground to the faster SSDs, Seagate CEO Steve Luczo seems to think that hard-drive sales will increase quite a bit this year and the next, with 2011 described as a “monster.” According to him, the hard-drive market outside the US has begun to recover from the recession during 2009 and the States will start picking up the pace during this year's second half. Most analysts estimate a 10%-15% increase in year-on-year sales, smaller than those Luczo estimates.
“A lot of other places in the world have been switched on,” Luczo says. He adds that, in the last half of 2010, “The U.S. switches on,” and that, “2011 will be a monster, with the world clicking on all cylinders.”
One person who seems to share his opinion is Stifel Niklaus analyst Aaron Rakers. Due to the probable surge of pent-up demand, enterprise storage sales are expected to ramp up significantly, possibly even challenging the company's ability to keep up with demand.
“IDC currently estimates that overall enterprise storage spending would be essentially flat yr/yr in 2010 – we differ... we currently estimate total enterprise storage spending to increase 9-10 per cent yr/yr in 2010, followed by five per cent yr/yr growth in 2011,” Rakers shares.
Seagate Executive VP for Sales Dave Mosely seems to think that the 2010 supply chain will be rather tight, even though long lead times for capital investments might make it difficult for component suppliers to quickly increase production. He also adds that “lots of demand” has been created in areas where falling laptop price points have made hardware more affordable. The areas where this phenomenon took place were those that delivered the per-capita income.
As a side note, Seagate's shares fell by 0.8% on Friday, specifically by 15 cents, to $17.89.