Peripherals Special: Personal Storage

Falling prices widen personal storage options

Rapidly falling prices of storage devices like hard disk drives, CDs and DVDs are giving users better value for money. Thanks to the affordability factor, users are getting the benefit of higher speed and memory capacities. Chitra Padmanabhan checks out the trends in personal storage

According to Raman Khosla, the difference in the price between 40 GB hard drives and 80 GB hard drives is expected to narrow even further in the near future

Mobile personal storage was once looked at through a very narrow perspective. An average user rarely ventured beyond the floppy. This was fuelled by the fact that the user knew he could retrieve his data anywhere and everywhere. Secondly, floppies were the most affordable medium of storage available. With the proliferation of the Internet, dependence on floppies reduced to a great extent in terms of transferring of files. Today, though floppies still command a significant portion of the pie, CDs are recognised as an established, alternative medium of storage.

Both CDs and floppies are running neck to neck in the race for market share, and the floppy is falling behind. In the long run, CDs are expected to become as ubiquitous as the floppy as prices of CDs fall even below floppies. With falling demand for floppies, USB drives have also achieved considerable amount of acceptability over the last year. On the hard drive side users are able to obtain higher memory capacity and better data transfer speeds in the wake of falling prices. However, the trend of falling prices is not confined to hard disk drives alone and is seen throughout the personal storage device space.

Hard drives derive economies of scale

Though hard disk drives stand at the core of personal storage, over the years this segment has gone through various phases of technological advancements. When you look back to the year 2001, 10 GB hard-drives at 5400 RPM (rotations per minute) were prominent in the market. Today, 80 GB hard-drives at 7200 RPM are gradually becoming the standard. In the end of 2002, though 20 GB and 30 GB hard drives had become a norm in the industry, the market was moving towards the adoption of 40 GB hard drives. In the year 2003, the demand for 40 GB hard drives had soared considerably. In tune with the law of supply in market economics, as the demand for 40 GB hard drives increased, prices kept coming down, to the extent that it almost equalled the price of entry-level hard drives i.e. 30 GB. Since then 40 GB hard drives have become an industry standard and vendors have gradually cut down the production of 30 GB hard drives.

As in any other production environment, the laws pertaining to economies of scale apply to hard drives as well. Currently, a similar phenomenon is pushing the adoption of 80 GB hard drives. The prices of 80 GB hard drives are rapidly falling and will continue until prices come very close to the price of an entry-level hard drive.

Since this is a transition phase for 80 GB hard drives, vendors are consciously taking measures to push the market to the next level. “Currently we are planning to carry out road shows and awareness programmes to boost the adoption of higher capacity hard drives. Today, the price of a 40 GB hard drive is about Rs 3,000-plus while an 80 GB hard drive at 5400 RPM costs about Rs 4,000-plus. The customer is approximately required to pay Rs 1,000 more, which is likely to fall further,” says Raman Khosla, country product manager for HDD business, Samsung India Electronics. By the end of 2004, 80 GB bard drives are likely to become the industry norm.

Hafeez Khwaja says the next two years will see a transition from PATA to the SATA interface on the desktop and significant penetration of SATA in the enterprise market

According to IDC India, the total market in the calendar year 2002 in terms of units was 2.63 million and the value of the market was Rs 1,454 crore. The hard drive market experienced a growth rate of 16.8 percent in 2003 and is expected to grow at 22.1 percent in the year 2004. The market for hard drives is likely to experience a CAGR (compound annual growth rate) of 16.6 percent between 2004-2007. A large number of PCs in the current installed base have hard drives of capacities ranging from 2 GB to 10 GB. When these users shift to new applications or exhaust their storage space they will opt for an upgrade of their hard drives. “Demand for high capacity drives will continue to be fuelled by the availability of bulky operating systems and software applications. This will push the replacement demand for hard disk drives in the installed base,” says Sanjit Sinha, head-hardware research, IDC India.

Hard drives are said to be doing well if the total number of units exceed the count of the PC market since some hard drives are reserved for replacement and upgradation needs. Currently, 30-49.99 GB hard drives occupy 60.7 percent of the market, 20 GB-29.9GB hard drives occupy 29.5 percent and 50GB and above consists of 4.1 percent of market share. In 2001, 66 percent of the market was occupied by 20-29.9 GB hard drives.

Technology progression

The technology associated with hard drives is progressing in leaps and bounds. Till recently Parallel ATA (PATA) was the industry norm. Now Serial ATA (SATA) technology is making significant inroads. The prime reason for this shift is that PATA technology can have a maximum data transfer rate of 133 Mbps. The first generation of SATA technology is capable of achieving a data transfer rate of 150 Mbps and in the next three to four years it is likely to go up to 600 Mbps.

“The next two years will see a transition from PATA to the SATA interface on the desktop and significant penetration of SATA in the enterprise market—as much as 40 or more percent of that market,” says Hafeez Khwaja, regional director for emerging markets, Western Digital. Hitachi claims to have the smallest hard drives in the world with a maximum capacity of 4 GB. These drives are called microdrives and their size is equal to that of a matchbox. “Hitachi has a total of 3,894 patents in storage technology,” says Jaya Dharan, general manager APAC South, Hitachi Global Storage Technologies.

In India, typically there is a clear-cut segregation in the market for PC-based peripherals and consumer electronics. In the next two years this gap is expected to narrow. Companies like Seagate and Samsung are soon cashing in on this trend by introducing products specifically catering to this space. Iomega has recently released working prototypes of a storage medium based on the RRD (Removable Rigid Disk) technology. The potential usage of this technology would range from medical imaging and professional digital video capturing, editing and archiving tasks to use in engineering workstations, video surveillance systems and other high performance desktop applications that involve managing large volumes of data.

USB gains prominence

Flash memory is replacing the floppy disk as the new media for portable storage. A few examples of flash memory include CompactFlash, SmartMedia and Memory Stick, which are most often found in digital cameras. Just about any computer today comes with one or more universal serial bus (USB) connectors. These USB ports let a user attach anything from printers to mice. The pen drive is a plug-and-play device that can be plugged into a USB port, and can also be automatically detected by a PC, letting users copy, delete and move data, from hard drive to the pen drive and back.

A pen-like device carrying up to 8 GB of data can be rated as the most convenient mobile storage device. Since the past one year the market for pen drives is growing strongly. These devices can even be used to play media files directly. The product starts from 64 MB and goes right up to 8 GB. “Pen drives are different from other storage media in the sense that USB has a built-in power supply so devices do not need a battery, software or cables,” says Dushyant Mehta, CEO of Mediaman.

According to Mediaman, sales of USB-based devices have drastically picked up since March 2003, a trend also fuelled by falling prices. The company claims to have supplied at least 25,000 units of the product in the last year. The companies in this market include Iomega, Sony, Transcend, etc. Sony has introduced its second-generation flash memory-based storage device called ‘Micro Vault’ in India, which enables users to plug and play at high speeds for high performance. The company expects to sell about 600 Micro Vaults in calendar year 2004. Iomega also has Mini USB drives available in 64 MB and 1 GB capacities.

Optical storage surges as floppy market falls

Vendors says that the dip in their floppy business is quickly compensated by a surge in the CD business. “This trend will continue for the next two years where the market for floppies and CDs will move in opposite directions,” says Rajiv K Bapna, managing director of Amkette.

The prices of CDs have been gradually falling, making it more affordable for the average user. “As far as personal storage is concerned the Indian market is seen as a very price-sensitive market; a fall in prices brings about quick adoption,” says Sumitra Giri, programme manager for India, Imation. Secondly, CD-Writers are becoming a de facto standard for system configuration of PCs in the assembled as well as in the branded space. “With digital photography and multimedia becoming common, downloading and storing of images, etc, will be one of the prime drivers for this business,” says Moser Baer’s spokesperson.

This market is growing thanks to growth of PC usage in the home as well as the corporate segment. In the home segment, the primary use is to download and store while in the corporate it is more for transfer of files and archival purposes.

Price consciousness is the major reason why the CD-ROM drive still has the lion’s share of the optical disk drive (ODD) market. But careful analysis shows that the price difference between a CD-ROM and a CD-RW is not much, if we consider the value-adds that a CD-RW provides over the CD-ROM. “The market for CD-RWs is increasing considerably due to falling prices,” says Rajesh Goenka, divisional head-Mumbai, Rashi Peripherals. Applications like copying of music, recording videos, creating CD albums, and creation of data back-ups will increasingly drive customers towards CD-RWs.

There is an emerging market in the DVD space but this is so far confined only to the corporate segment. There are lots of standards-related problems associated with DVDs, which need to be ironed out for the market to move ahead. There are six recordable versions of DVD-ROMs: DVD-R for General, DVD-R for Authoring, DVD-RAM, DVD-RW, DVD+RW, and DVD+R. DVD-R and DVD+R can record data once like CD-R, while DVD-RAM, DVD-RW, and DVD+RW can be rewritten thousands of times, like a CD-RW. DVD-R was first available in 1997. DVD-RAM followed in summer 1998. DVD-RW came out in Japan in December 1999, but was not available in the US until 2001 and DVD+RW became available in 2001. DVD+R was released in mid 2002.

Over the next two years the market for floppies and CDs will move in opposite directions, with floppies giving way to CDs, says Rajiv K Bapna

The market will determine which of these multiple standards succeeds or if they end up coexisting with each other. There are many claims that one or the other format is better, but they are actually very similar. In 2003, many companies began making drives that could record in both ‘dash’ (-) and ‘plus’ (+) format. DVD standards are yet to be finalised. Industry experts expect this to take place by mid-2004. “DVD standards are ambiguous. There’s still the split between the plus and minus camps. We expect consolidation to take place by the year-end,” says Sanjeev Gupta, senior business development manager-Asia South, Iomega. By this year, drives with the ability to read both the plus and minus standards should be commonplace.

The common thread between all types of personal storage devices is the trend of falling prices, which is bringing about segregation in the market as per user needs. But the most significant among them is the mass adoption of USB-based devices in 2003, which is likely to see a further fall in prices, creating renewed demand.

Floppies give way to CDs

Vendors claim that a dip in their floppy disk business is quickly compensated by a surge in the CD business. This trend will continue for the next two years and the market for floppies and CDs will move in opposite directions. CD-Writers are becoming a de facto standard in PC configurations. With digital photography and multimedia becoming very popular, downloading and storing of these images will be one of the prime drivers for this business. The market for CD-RWs is rising considerably due to falling prices. Price consciousness is the major reason why the CD-ROM drive still has the lion’s share in the ODD market, as compared to CD-RWs.

chitra@expresscomputeronline.com