HDD Worldwide

MARKET AN ALYSIS
Worldwide Hard Disk Drive 2008–2012 Forecast and

Analysis: Shrugging Off Storage Technology Challengers
John Rydning
IDC OPINION
Worldwide hard disk drive (HDD) shipments increased by 15.3% in 2007 to surpass
500 million units. HDD shipments in 2007 exceeded expectations because of PC
www.idc.com
market dynamics that spurred portable PC demand and subsequently mobile 2.5in.
HDD demand in the latter part of the year. In 2008, HDD shipments are expected to
increase year on year by 13%, even in the face of economic uncertainty in the United
States. HDD demand is growing in part because cheaper HDD storage on a price-
F.508.935.4015
per-gigabyte basis enables digital information to be captured and stored

inexpensively and easily. Nevertheless, the growth rate for HDD unit shipments is
slowing. The 2007–2012 compound annual growth rate (CAGR) for HDD shipments
in this forecast is projected to be 9.2%. Comparatively, HDD shipments grew from
2002 to 2007 at a CAGR of 14.3%. The decline of HDD shipment growth rates is
P.508.872.8200
attributed mainly to the slower growth of large, mature end markets for HDDs and the
use of higher-capacity disk drives in datacenters to combat the rapid growth of digital
content. Despite slowing HDD shipment growth rates, both unit shipments and
revenue in this HDD forecast iteration are higher overall than IDC's previous forecast.
Key factors relevant with this worldwide 2007–2012 HDD forecast include the
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA
following:
! Flash-based solid state drives (SSDs) will reach cost and endurance thresholds
that make possible increased penetration of SSDs in traditional HDD markets
over the next several years. SSDs will curtail HDD demand in some markets, but
the HDD industry will shrug off these and other competing storage technologies
to attain consecutive years of record-setting HDD shipments and revenue.
! HDD markets least threatened by competing storage technologies such as

enterprise storage systems, personal storage devices (aka external attached
hard disk drives), and personal video recorders (PVRs) represented 23% of unit
shipments in 2007 and 35% of HDD terabytes shipped. These same markets will
procure nearly 40% of HDD units that ship in 2012 and represent more than 50%
of HDD terabyte shipments.
! Successive generations of HDD products using perpendicular magnetic

recording (PMR) technology will enable average HDD capacities to increase by a
factor of nearly three times from 170GB in 2007 to more than 500GB by 2012.
Filing Information: May 2008, IDC #212231, Volume: 1

Storage Mechanisms: Disk: Market Analysis
T ABLE OF CONT ENT S
In This Study 1
Methodology ............................................................................................................................................. 1
S i t u a t i o n O ve r v i e w 2
Hard Disk Drive Demand Drivers.............................................................................................................. 2
Hard Disk Drive Average Price-per-Gigabyte History ............................................................................... 3
Hard Disk Drive Industry Structure ........................................................................................................... 3
Future Outlook 9
Forecast and Assumptions ....................................................................................................................... 9
Market Context ......................................................................................................................................... 43
Essential Guidance 44
Learn More 45
Related Research ..................................................................................................................................... 45
Definitions................................................................................................................................................. 46
IDC System Classifications....................................................................................................................... 48
Appendix: HDD Shipments and Revenue, 2006–2012 ............................................................................. 52
#212231 ©2008 IDC

LIST OF T ABLES
P
1 Worldwide HDD Shipments by Vendor, 2006 and 2007: All HDD Form Factors.......................... 8
2 Worldwide HDD Revenue by Vendor, 2006 and 2007: All HDD Form Factors ............................ 9
3 Key Forecast Assumptions for the Worldwide Hard Disk Drive Market, 2008–2012 .................... 10
4 Worldwide HDD Shipments by Major Application, 2004–2012..................................................... 18
5 Worldwide HDD Revenue by Major Application, 2004–2012 ....................................................... 19
6 Worldwide Enterprise-Class HDD Price per Gigabyte, 1998–2007.............................................. 25
7 Worldwide HDD Shipments for Enterprise Applications by HDD Form Factor, 2007–2012 ......... 26
8 Worldwide HDD Shipments and Revenue for PC Applications, 2007–2012 ................................ 27
9 Worldwide HDD Shipments for Portable PCs by HDD Form Factor, 2007–2012......................... 27
10 Worldwide HDD Shipments for Desktop PCs by HDD Form Factor, 2007–2012 ......................... 29
11 Worldwide HDD Shipments for Personal Storage Devices by HDD Form Factor, 2007–2012 .... 31
12 Worldwide HDD Shipments for Consumer Electronics Applications, 2007–2012......................... 32
13 Worldwide HDD Revenue for Consumer Electronics Applications, 2007–2012 ........................... 34
14 Worldwide Mobile-Class 1.0in. and 1.3in. HDD Analysis, 2007–2012 ......................................... 35
15 Worldwide Mobile-Class 1.8in. HDD Analysis, 2007–2012 .......................................................... 36
16 Worldwide Mobile-Class 2.5in. HDD Analysis, 2007–2012 .......................................................... 37
17 Worldwide Desktop-Class 3.5in. HDD Analysis, 2007–2012........................................................ 38
18 Worldwide Enterprise-Class 2.5in. HDD Analysis, 2007–2012 .................................................... 40
19 Worldwide Enterprise-Class 3.5in. HDD Analysis, 2007–2012 .................................................... 41
20 Worldwide HDD Shipments by Capacity Range, 2007–2012: All HDD Form Factors.................. 42
21 Worldwide HDD Shipments and Revenue, 2005–2012: Comparison of 2007
and 2008 Forecasts ..................................................................................................................... 43
22 Worldwide HDD Shipments Analysis: Consumption by HDD Form Factor, 2006–2012............... 53
23 Worldwide HDD Revenue Analysis: Consumption by HDD Form Factor, 2006–2012 ................. 59
©2008 IDC #212231

LIST OF FIGURES
P
1 Worldwide Average Price per Gigabyte of HDD Storage, 1998–2007 ......................................... 3
2 Worldwide Estimated HDD Industry TAM, 2008........................................................................... 5
3 Worldwide Ownership by HDD OEMs of Key HDD Component Manufacturing Capabilities
and Remaining Independent Suppliers of Major HDD Components, 2006 .................................. 6
4 Worldwide Ownership by HDD OEMs of Key HDD Component Manufacturing Capabilities
and Remaining Independent Suppliers of Major HDD Components, 2007 .................................. 7
5 Worldwide PMR and GMR HDD Shipments Share of Total HDD Shipments by Year After
Technology Introduction............................................................................................................... 22
6 Worldwide Commercialized HDD Leading Edge Areal Density, 1998–2007................................ 22
7 Worldwide Personal Storage Device Installed Base Share of Home and Small
Business/Small Office PC Installed Base..................................................................................... 30
8 Worldwide HDD Shipments and Revenue, 2005–2012: Comparison of 2007
and 2008 Forecasts ..................................................................................................................... 44
#212231 ©2008 IDC

IN THIS STUDY
This IDC study presents an updated look at the hard disk drive market through 2012.
It is valid as of May 2008, and it provides a forecast of HDD demand both by standard
HDD industry form factors and for the following HDD consumption segments: portable
PCs, desktop PCs, enterprise storage systems, servers, personal storage devices
(aka external hard drives), and various consumer electronics (CE) products in a
variety of CE markets. For comparison purposes, the tables in this document also
include historical figures for 2004–2007.
The HDD market opportunities are discussed in terms of HDD OEM unit shipments,
exit factory revenue, terabytes shipped, and compound annual growth rates for the
period 2007–2012. Additionally, other metrics, trends, and relevant industry dynamics
are analyzed in an attempt to provide the reader with a solid understanding of the
current situation and future outlook for the worldwide HDD market.
Methodology
The primary HDD shipment and revenue data for this study was collected through
telephone and face-to-face interviews and surveys with HDD manufacturers,
component suppliers, and HDD customers. Current and historical shipment data is
the sum of all unit estimates for all HDD manufacturers. The data was verified using
publicly reported financial information, related computer system and consumer
electronic device research, and HDD component supplier data. All unit shipment and
revenue data in this study reflects shipments by HDD manufacturers to both captive
and noncaptive customers.
Various device and application forecasts from research groups internal to IDC are
used as a primary source of data for constructing five-year HDD forecasts. Please
note that this forecast reflects the HDD shipment opportunity by application only, not
the forecast for the actual applications or devices themselves. Shipment lead times,
inventory offsets, and other supply chain dynamics are also considered. For detailed
forecasts of the various applications and devices, one should look to the specific
research from the groups within IDC that produce these forecasts: Personal
Computing, Servers, Storage Systems, Personal Storage, and Consumer Devices.
Five-year forecast estimates for HDD units and revenue are derived in part by
analyzing historical HDD trends. These historical trends are put into the context of
forward-looking HDD market and industry dynamics. Assumptions for each HDD
demand consumption category and various HDD form factor forecasts (see the
assumptions associated with the consumption discussion for each HDD segment —
enterprise, PC, personal storage, and consumer devices) are also considered.
All shipment, revenue, and average unit price forecast figures for 2008–2012 are IDC
estimates. Historical unit forecast and revenue data presented here are as published
in prior IDC documents based on the taxonomies at the time the data was originally
published.
Note: All numbers in this document may not be exact due to rounding.
©2008 IDC #212231 1

SITUATION OVERVIEW
Hard Disk Drive Demand Drivers
The HDD industry posted record-breaking shipments and revenue for the third
consecutive year in 2007. Unit shipments exceeded expectations, driven by higher
than expected HDD demand from two specific markets: PCs and personal storage
devices. The trend toward mobile computing is creating strong demand, in particular
for mobile 2.5in. HDDs. Amplifying the mobile computing trend in 2007 were PC
market dynamics that spurred portable PC demand in the latter half of the year and
subsequently pushed mobile 2.5in. HDD shipments 37% higher year on year for
compute markets. Aggressive HDD price erosion of mobile 2.5in. HDDs in the first
half of 2007 was a major contributing factor that spurred upside HDD demand for
portable PC markets. Lower mobile 2.5in. HDD prices, especially at 120GB and
160GB capacity points, enabled PC OEMs to sell a portable PC with more storage
capacity at lower prices in the second half of 2007. Falling prices for other major
portable PC components (i.e., microprocessors, DRAM, and displays) in the first half
of 2007, coupled with a rapid decline in the value of the U.S. dollar, helped to create
the perfect storm for strong portable PC demand in 2H07.
Terabyte growth associated with standalone storage systems or storage shipped with
servers will grow at a 2007–2012 CAGR of more than 50%. Although SSDs will begin
to be leveraged as a solution for input/output intensive applications, HDDs will
continue to be the primary storage device used in these systems. Capacity-optimized
HDDs designed for enterprise environments will increasingly be leveraged to provide
the capacity needed for these systems.
HDD shipments for personal storage devices (aka external USB-attached hard disk
drives) increased by more than 70% year on year. The personal storage market is the
fastest growing market for HDDs and provides HDD OEMs with an opportunity to sell
branded products directly to customers through retail or etail channels.
Overall, HDD shipments to computing markets posted 16% unit shipment growth in
2007. Note that IDC categorizes personal storage devices within compute markets. In
contrast to the compute market, the consumer electronics market succumbed again
to the vagaries of rapidly changing consumer and manufacturing OEM preferences as
well as the continual evolution of devices where features and functionality are
subsumed by a multipurpose device (e.g., PDA and mobile phone), moderating the
need for discrete devices. As a result, HDD shipments for CE devices declined by 3%
in 2007.
Although HDD shipments to CE markets generally remain volatile, HDD demand has
grown steadily for some CE devices such as PVRs. Shipments of HDDs for stationary
CE devices grew by 13% year on year, whereas HDD shipments for portable CE
devices declined by 23%. CE manufacturers are increasingly using embedded NAND
flash memory for data storage in portable devices. Correspondingly, shipments of
1.0in. HDDs were discontinued in 2007.
Computing markets, including personal storage devices, will continue to be a

significant growth driver for the HDD industry.
2 #212231 ©2008 IDC

Hard Disk Drive Average Price-per-Gigabyte
History
A rapid transition by the HDD industry to PMR technology in 2007 enabled a 33.5%
year-over-year decline of the price per gigabyte of HDDs across all form factors, the
highest rate of decline since 2002. Figure 1 shows the average HDD price per
gigabyte for HDD storage from 1998 to 2007.
Looking ahead, we expect the price per gigabyte of HDD storage for 2007–2012 will
decline at a CAGR of -21%.
FIGURE 1
Worldwide Average Price per Gigabyte of HDD Storage,

1998–2007
40 0
35
-10
30
-20
Growth (%)
HDD $/GB
25
20 -30
15
-40
10
-50
5
0 -60
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
HDD $/GB
Growth
Source: IDC, 2008
Hard Disk Drive Industry Structure
Upon Cornice's and GS Magictor's exit from the industry in 2007 and 2006,
respectively, only seven companies remain that design and manufacture hard disk
drives. In addition to these seven companies, three companies assemble hard disk
drives under contract manufacturing agreements with certain HDD OEMs. The three
companies performing contract manufacturing for HDD OEMs are:
! SAE, a subsidiary of TDK. TDK's primary HDD-related business is the design

and manufacturing of HDD read/write recording heads. TDK is the last remaining
independent supplier of recording heads to the HDD industry.
©2008 IDC #212231 3

! Excelstor, a subsidiary of Great Wall Technology, which is a subsidiary of China
Electronics Corporation, a $16 billion People's Republic of China (PRC)
government-owned conglomerate.
! Union Technology Company (UTC), Thailand. UTC is a subsidiary of Saha-Union

Public Company Limited.
Seagate completed its acquisition of Maxtor in 2006 and subsumed Maxtor's

manufacturing operations into its global operations in 2007.
After several quarters of significant operating losses, Hitachi GST investigated selling
a share of the company to private equity investors late in 2007. Early 2008, Hitachi
announced it would proceed as an independent entity.
HDD OEMs discontinued production of 1.0in. HDDs in 2007, while Seagate and
Hitachi GST also decided to discontinue new 1.8in. form factor HDD products. The
entries by HDD OEMs into new HDD form factors in 2007 were Samsung's
announcement of a 1.3in. HDD and Hitachi GST's entry into the 2.5in. enterprise-
class segment. We anticipate Western Digital will enter the 2.5in. enterprise-class
segment in 2008. Figure 2 provides a summary of HDD OEM participation in each
HDD form factor and IDC's estimate of the size of each form factor in 2008 in terms of
unit shipments and revenue.
In 2007, TDK/SAE acquired Alps Electric to make TDK/SAE the sole remaining
independent supplier of HDD magnetic recording heads. TDK/SAE also acquired
Magnecomp, a suspension assembly supplier. As a subsidiary of TDK, Magnecomp
will continue to supply suspensions to non-TDK/SAE customers for an undetermined
period of time, virtually leaving the industry with two independent suppliers —
Hutchinson Technology and NHK Spring. One other suspension supplier, Suncall,
produces comparatively smaller volumes of suspension assemblies only for Hitachi
GST.
Western Digital acquired Komag, a producer of finished disk media and disk media
substrates, in 2007. Subsequently, Western Digital will produce the vast majority of its
own disk media, thus leaving the industry with three independent disk media
suppliers.
While the number of HDD manufacturers did not change, there were significant
changes to the supply base of key HDD components. In general, the HDD industry
became more vertically integrated in 2007. Figures 3 and 4 show the HDD industry
structure in 2006 and 2007, respectively.
Vertical integration does enable operational efficiencies. Vertically integrated

companies often ramp new HDD technology to high volume slightly faster than
nonvertically integrated HDD OEMs. Despite this operational advantage, a vertically
integrated HDD OEM's overreliance on internally manufactured HDD components can
limit access to HDD technology. Periodically, this can affect an HDD OEM's
competitiveness to produce the highest capacity commercially available products, at
least temporarily.
4 #212231 ©2008 IDC

FIGURE 2
Worldwide Estimated HDD Industry TAM, 2008
Units Revenue
350M $18B
$16B
300M
Seagate
$14B
250M Western Digital
$12B
200M Hitachi GST $10B
150M $8B
Samsung
$6B
100M Toshiba
$4B
Fujitsu Fujitsu
50M
Excelstor $2B
0M $0B
<=1.xin. 1.8in. 2.5in. 3.5in. DT 3.5in. Ent 2.5in. Ent
Revenue Units
Source: IDC, 2008
©2008 IDC #212231 5

FIGURE 3
Worldwide Ownership by HDD OEMs of Key HDD Component

Manufacturing Capabilities and Remaining Independent Suppliers of
Major HDD Components, 2006
Source: IDC, 2008
6 #212231 ©2008 IDC

FIGURE 4
Worldwide Ownership by HDD OEMs of Key HDD Component

Manufacturing Capabilities and Remaining Independent Suppliers of
Major HDD Components, 2007
Source: IDC, 2008
The three largest HDD OEMs represent 75% of all HDD shipments in 2007 (see
Table 1).
The three largest HDD OEMs in terms of unit market share also happen to be the
most vertically integrated. One potential catalyst for further industry consolidation
would be if the three largest HDD OEMs today collectively attained further market
share gains. Additional industry consolidation could potentially create a tighter supply-
demand balance for HDDs and serve to slow HDD average sales price (ASP)
erosion.
Another potential catalyst for further industry consolidation would be additional HDD
OEM participation in the 2.5in. enterprise-class HDD segment. A competitive
response by one of the incumbents in this segment might be to acquire the new
entrant to maintain a favorable supply/demand balance.
©2008 IDC #212231 7

T ABLE 1
Worldwide HDD Shipments by Vendor, 2006 and 2007: All HDD Form Factors
2006 2007
Shipments Share Shipments Share 2006–2007 Change in

(M) (%) (M) (%) Growth (%) Share
Seagate* 139,175 31.9 175,734 35.0 26.3 -1.6
Maxtor* 20,117 4.6 – – -100.0 NA
Western Digital 84,745 19.4 113,243 22.5 33.6 3.1
Hitachi 70,015 16.1 89,443 17.8 27.7 1.7
Samsung 47,654 10.9 47,816 9.5 0.3 -1.4
Toshiba 40,461 9.3 37,570 7.5 -7.1 -1.8
Fujitsu 29,820 6.8 35,918 7.1 20.5 0.3
Excelstor 2,821 0.6 2,752 0.5 -2.4 -0.1
Cornice 967 0.2 35 0.0 -96.4 -0.2
GS Magicstor 104 0.0 – – -100.0 0.0
Total 435,878 100.0 502,511 100.0 15.3
* Seagate includes Maxtor share in 2006.

Source: IDC, 2008
But given the degree of industry consolidation that has taken place over the past two
years, we believe there will be a pause in mergers, acquisitions, or joint ventures and
that major changes to the HDD industry structure are unlikely near term.
From a revenue perspective, the four largest HDD OEMs represent 84% of total HDD
industry revenue (see Table 2). These four OEMs all compete in the two largest HDD
form factor segments, desktop-class 3.5in. and mobile-class 2.5in.
With 5–6 HDD OEMs competing in the largest HDD segments, and with new entrants
expected in the 2.5in. enterprise-class HDD segment in 2008, intense competitive
pressures will persist. Also, managing industry supply in aggregate versus HDD
demand will be an ongoing challenge. We note, however, that HDD OEMs were much
more disciplined in adding manufacturing capacity in 2007 and managing supply to
demand compared with prior years. Nevertheless, competitive dynamics will serve to
keep downward pressure on HDD ASPs, at least near term.
8 #212231 ©2008 IDC

T ABLE 2
Worldwide HDD Revenue by Vendor, 2006 and 2007: All HDD Form Factors
2006 2007
Revenue Share Revenue Share 2006–2007 Change in

($B) (%) ($B) (%) Growth (%) Share
Seagate* 10.33 34.9 12.28 37.9 18.9 -1.7
Maxtor* 1.40 4.7 – – -100.0 NA
Western Digital 4.90 16.6 6.60 20.4 34.5 3.8
Hitachi 4.87 16.5 5.56 17.2 14.1 0.7
Samsung 2.53 8.5 2.84 8.8 12.6 0.2
Toshiba 2.77 9.3 2.34 7.2 -15.6 -2.1
Fujitsu 2.61 8.8 2.66 8.2 1.9 -0.6
Excelstor 0.12 0.4 0.11 0.3 -2.5 0.0
Cornice 0.06 0.2 0.00 0.0 -96.2 -0.2
GS Magicstor 0.01 0.0 – – -100.0 0.0
Total 29.59 100.0 32.39 100.0 9.5
* Seagate includes Maxtor share in 2006.

Source: IDC, 2008
FUTURE OUTLOOK
Forecast and Assumptions
Assumptions
Table 3 lists the key assumptions used to generate the 2008–2012 forecast.
©2008 IDC #212231 9

T ABLE 3
Key Forecast Assumptions for the Worldwide Hard Disk Drive Market, 2008–2012
Accelerator/
Inhibitor/ Certainty of
Market Force IDC Assumption Impact Neutral Assumption
Macroeconomics
Economy IDC assumes that worldwide Moderate. A potential

economic growth will be downside scenario for IT
challenged in 2008. In 2009, spending seems more likely,
economic growth will be slightly given the continued uncertainty
lower worldwide as developed over the U.S. housing market
economies pick up growth but and potential declines in
emerging economies drop. By consumer spending. Economic
↓
2010, economic growth strength is a key driver of
worldwide should return to mature technology markets.
###$$
normal. Nevertheless, essential
hardware replacements
coupled with the worldwide
growth of digital information will
fuel demand for storage
devices despite overall
economic growth.
Policy Compliance is still driving some High. Compliance spending

IT spending, including could crowd out other IT
Sarbanes Oxley, Basel II, and spending or, conversely, it
HIPAA. We believe any surge could drive up spending.
in demand for storage capacity Compliance requirements are
for organizations to be pushing higher enterprise ↑ ###$$
compliant has passed, so we storage requirements for
have lowered our certainty companies and public
rating. organizations. The effect is
strong demand for HDDs for
storage systems.
Corporate profits IDC's assumption is for U.S. High. Company profits need to
profit growth to come in at 1% be high enough to fund
in 2008 and 3% in 2009. This is information technology and
a far cry from the 20%+ profit communications (IT&C)
growth in 2006. initiatives. It appears that
corporate profits will not be ↔ ###$$
enough to fund all IT&C
initiatives; new projects will
require cost cutting, quick
paybacks, and short
implementation times.
10 #212231 ©2008 IDC

T ABLE 3
Accelerator/
Hardware IT Hardware markets defied Moderate. Hardware spending

spending gravity in 2007; however, will continue to be about 40% of
growth is expected to fall to total IT spending. Near term,
↑
under 2% in the United States there will be more downside
in 2008 — but will come in at than upside in the face of a
####$
over 5% worldwide. IDC slowing economy.
assumes a five-year CAGR of
4.6% worldwide.
Pervasive This term refers to the High. Communicating client

computing proliferation of client devices devices will depend upon vast
and end-user or end-use content depots to deliver data
devices at the network edge. to the edge of networks. Only
By 2011, IDC expects five hard disk drive technology is
times as many non-PC devices capable of economically
to be connected to networks as providing random-access high-
PCs — including Internet- capacity storage. The effect is
↑
enabled cell phones, networked strong demand for HDDs for
entertainment and gaming storage systems and content
####$
devices, automobiles, building depots.
automation systems, and
industrial controllers. This
doesn't even count RFID tags
and sensors. IDC assumes that
communicating client devices
will proliferate at 5–10 times the
rate of PCs installed.
Green IT This is a term referring to a High. The adoption of green IT

basket of technologies and products and practices should
practices designed to minimize increase demand for new IT
power costs, carbon output, products, specifically HDDs that
and hazardous waste. The are proven to conserve power
major impact of green IT will be consumption without sacrificing
seen in technology choices performance.
based on low power, more
attention to asset disposal, and
↑
some change in vendor
selection. Depending on the
####$
country, voluntary adherence to
green IT principals could
become law. For example,
power and cooling expenses
are growing four times as fast
as new server spend and will
move from half of the value of
spending on new servers to
nearly three-quarters by 2011.
©2008 IDC #212231 11

T ABLE 3
Accelerator/
Demographics The aging workforce in the Low. The Asia/Pacific region is

developed world and the already the center of gravity for
growth of the workforce in hard disk drive manufacturing.
lower-cost geographies will But IT hardware supply in
affect both the supply of IT and general is increasingly at risk
the demand. These may be from potential political or
long-term trends, but they are economic disruptions. Likewise,
already manifest in the
globalization of the workforce
HDD demand is also
increasingly at risk as IT
↔ ####$
and the slow IT market growth hardware consumption
in places like Western Europe. increasingly shifts to
IDC assumes that the center of geographies outside the United
ICT supply will migrate toward States and Western Europe.
Asia and Eastern Europe and,
in general, will diversify.
HDD end-market
trends and
dynamics
Desktop PCs Unceasing competition from High. New users, particularly

portables and falling price-sensitive users in
replacements have dramatically emerging markets, will continue
reduced desktop growth. to favor desktops.
Although the market will receive Nevertheless, replacements
↓
a small boost from Vista and from more experienced users
commercial replacements in will probably not support
####$
2008 will contribute to volume, current volumes — even with
we expect shipments to decline lower prices, new designs, and
steadily throughout most of the a sustained performance
forecast period. advantage over portables
impacting 3.5in. ATA demand.
Commercial shift to The transition has been slowed High. Portable adoption is one
portable PCs slightly by cost concerns and of the most significant market
uncertainty regarding security drivers and adds to demand for
and the return on investment 2.5in. HDDs.
(ROI) of mobile computing.
However, the transition will
↑ ####$
continue steadily and remain a
key driver in system
replacements.
12 #212231 ©2008 IDC

T ABLE 3
Accelerator/
Consumer shift to Consumers continue to migrate High. Pricing trends, good-

portable PCs rapidly to portable systems enough computing, and the
based on reduced cost and the benefits of wireless connectivity
appeal of mobility. A diminished will continue to support the
performance penalty with
desktops may not last in terms
migration, further underpinning
potential upside demand for
↑ ####$
of raw horsepower but will mobile 2.5in. HDDs.
remain important in the user
experience.
Ultra-low-cost PCs New designs for ultra-low-cost Low. We are assuming no

computing may revolutionize impact from ultra-low-cost PCs
information access and such as the Eee PC until further
computing, particularly in low- evidence of their long-term
income segments. However, success in the market.
these systems could fall well Nevertheless, should these
short of their goals, both designs eventually supplant
technically and in volume
adoption. These systems hold
traditional PCs it would have a
negative impact on HDD
↓ ###$$
the potential for significant demand, particularly mobile
market change but need to 2.5in. HDD demand.
demonstrate their success
before projections for their
demand are incorporated into
our forecasts.
Consumer Video content remains the Moderate. The need for more
electronics primary demand driver for HDD storage capacity for consumers
adoption in CE devices. As is likely. In the long run,
such, HDD storage will be multiple device options for
leveraged mainly for stationary storing consumer content will
as opposed to increase. As multiple devices
portable/handheld CE devices. compete for consumer attention
Handhelds and other devices
are likely to integrate with PCs,
and spending, ease of use and
price will determine long-term
↑ ###$$
supporting PC growth. At the successful CE products.
same time, connecting CE
devices to PCs will push PC
content growth higher. This will
place upward pressure on HDD
capacities for consumer PCs.
©2008 IDC #212231 13

T ABLE 3
Accelerator/
Datacenter Power wastage in the High. Power wastage comes

thermodynamics datacenter has a significant from both underutilizing servers
effect on overall "power and over-provisioning of
capacity" (see Green IT cooling; this is being addressed
assumption). by virtualization to increase
utilization implementation of
datacenter best practices and
↑
dynamic cooling solutions.
HDDs will increasingly be
#####
evaluated in terms of watts per
gigabyte, watts per I/O, and
watts per rack. The implication
is to accelerate demand for
small form factor (SFF) HDDs,
and high-capacity (slower
revolutions per minute) HDDs.
Virtualization and Virtualization will drive sales of High. Systems need

system new and more richly configured components with faster speeds
management server systems. and more capacity to achieve
software the projected ROI benefits of
virtualization from a
consolidation and utilization
standpoint. This will result in
↑ ####$
demand for servers with higher
storage capacities, hence a
higher attach rates of high-
capacity HDDs.
HDD technology,
trends, and
dynamics
HDD areal density Perpendicular magnetic High. Average HDD capacities

growth recording technology has put will grow quickly near term to
HDD areal density on a new meet storage growth demand.
technology "S" curve. Leading- Rapidly increasing mobile 2.5in.
edge HDD areal density will HDD capacities will minimize
remain on a steep improvement any perceived storage capacity
slope through 2009. After 2009, penalties when deciding
areal density growth will require
assist technologies for PMR to
between a desktop or a
portable PC. In the long run,
↓ ###$$
sustain a 20–30% year-over- slower areal density growth
year growth rate. Overall, we means HDD capacity points will
assume a 2007–2012 CAGR of elongate, resulting in slightly
25–35% for HDD areal density higher component per drive
(possibly higher for sub-2.5in. requirements for key HDD
form factors). components.
14 #212231 ©2008 IDC

T ABLE 3
Accelerator/
Incursion of Capacity-optimized drives High. The penetration of

capacity-optimized (mainly SATA today) have been capacity-optimized drives into
HDDs into proven reliable enough in enterprise storage solutions will
↓
enterprise storage storage arrays and will grow to effectively replace 30–40%
more than 40% of the drives margin product with midteen
####$
consumed in enterprise storage margin product, hence reducing
solutions in 2012. industry revenue potential and
profitability.
Serial SCSI Serial Attached SCSI (SAS) Moderate. The successful

interface adoption 3.0Gbps products have introduction of SAS 6.0
displaced parallel SCSI and technology could encourage
↔
achieved mainstream adoption. traditional Fibre Channel (FC)
The storage ecosystem will system customers to shift to
###$$
migrate to SAS 6.0Gbps SAS products. This in turn
products beginning in 2009. could result in new enterprise
HDD demand.
Technology HDD technology required to Moderate. New HDD

integration assist PMR will be costly and technologies will be necessary
will be avoided by the HDD to maintain 25–35% AD growth
industry for as long as possible. rate. The investment
requirements for new
↓
technologies such as discrete
track recording or bit patterned
###$$
media (BPM) or heat-assisted
magnetic recording may be
cost prohibitive for many HDD
segments, thus limiting the ROI
opportunity.
Sub-1.8in. HDDs Aggressive NAND flash High. There is no demand for

capacity advancements and 1.0in. or smaller HDDs. The
↓
pricing will place tremendous 1.3in. HDD form factor, just
downward pressure on the recently introduced, will
#####
market opportunity for sub- succumb to competition from
1.8in. HDDs flash memory by 2010.
Capitalization
Components Significant investments will Moderate. The ROI will be

fabrication occur for component equipment challenging for component
↓
equipment to support new HDD technology suppliers, given the rapid price
and capacity requirements. erosion and the pressure to
####$
reduce bill of materials (BOM)
costs.
©2008 IDC #212231 15

T ABLE 3
Accelerator/
Market
characteristics
Degree of supplier The need to invest in PMR- Moderate. Strategic

concentration assist technologies and the partnerships, joint ventures,
need to make investments for and acquisitions are possible.
↑
new manufacturing capacity will The necessity to invest for new
cause industry participants to HDD technology and to
#$$$$
again consider further manage industry capacity
consolidation. growth may be a catalyst for
further industry consolidation.
New enterprise- One new supplier will enter the Moderate. Additional suppliers
class HDD 2.5in. enterprise-class HDD to HDD segments are expected
suppliers segment in 2008. Additional as market opportunities
↔
suppliers are considering increase. However, additional
entering this segment. vendors in the 2.5in. enterprise-
###$$
class HDD segment may be a
catalyst for further industry
consolidation.
Component supply IDC does not foresee High. Without a "governor" to

significant component prevent excess HDD
constraints through 2012. production, the likelihood for
overproduction and rapid price
↔ ####$
erosion increases.
Market ecosystem
Enterprise Terabyte shipments by Low. Increased usage of

solutions enterprise storage solutions capacity-optimized HDDs will
↓
(servers, storage systems, and absorb a growing proportion of
workstations) will grow at a this terabyte growth.
###$$
2007–2012 CAGR of more than
50%.
Desktop PC growth Desktop PC shipments will Low. The tie ratio of desktop-
grow at a 2007–2012 CAGR of class HDDs to desktop PCs is
approximately 6.5%, up from about 1.45 (currently) but will ↑ ####$
prior estimates of a 5% CAGR. erode as the percentage of
HDD shipments drops.
Portable PC growth Portable PC shipments will Low. The tie ratio of mobile-
grow at a 2007–2012 CAGR of class HDDs to laptop PCs is
approximately 25%. about 1.15 (currently). Growth
in the whitebook market will
↑ ####$
push the tie ratio higher.
16 #212231 ©2008 IDC

T ABLE 3
Accelerator/
Game consoles Future generations of gaming High. Users recognize the

consoles will include a mixture value of adding HDD storage to
↑
of units with the HDD as a game consoles. HDD demand
standard component, whereas for gaming markets will grow.
###$$
some will offer the HDD as an
add-on option.
PVRs Cable/satellite companies will Moderate. Consumer adoption

continue to deploy digital video is expected to accelerate.
recorder (DVR) enabled set-top Network DVR bears monitoring. ↔ ####$
boxes (STBs) that rely on HDD
storage
Legend: #$$$$ very low, ##$$$ low, ###$$ moderate, ####$ high, ##### very high
Source: IDC, 2008
Worldwide Hard Disk Drive Forecast

Worldwide HDD shipments are projected to rise by 13.0% in 2008, at a 9.2% 2007–
2012 CAGR. Worldwide HDD shipments will likely exceed 750 million units by 2012
(see Table 4). Unit shipments of enterprise storage, server, personal storage devices,
and personal video recorders will comprise nearly 50% of total HDD unit shipments
by 2012, up from 35% of total HDD shipments in 2007.
Although HDD industry revenue is expected to grow at only a 6.7% 2007–2012

CAGR, it is growing from a large base. HDD industry revenue was $30 billion in 2006
and will increase by roughly 50% in six years to approach $45 billion by 2012 (see
Table 5).
©2008 IDC #212231 17

T ABLE 4
Worldwide HDD Shipments by Major Application, 2004–2012 (000)
2007–
2012
CAGR
2004 2005 2006 2007 2008 2009 2010 2011 2012 (%)
Storage 17,086 19,781 23,034 30,026 33,870 37,363 43,954 56,465 72,508 19.3
systems
Entry 8,260 11,336 12,382 11,479 11,948 12,045 12,382 12,803 13,035 2.6
servers
Traditional 357 350 451 727 922 1,050 1,251 1,468 1,750 19.2
workstations
Desktop 182,449 198,513 203,783 212,908 215,003 214,958 212,866 214,859 210,277 -0.2
PCs
Personal 6,131 16,227 25,397 43,602 62,173 84,304 107,128 126,916 141,632 26.6
storage
(DAS and
NAS)
Portable 51,044 76,114 96,921 131,809 161,170 191,210 210,456 215,233 228,289 11.6
PCs
Consumer 40,629 58,416 73,910 71,960 82,546 90,730 100,781 106,178 112,088 9.3
electronics
Total 305,955 380,736 435,878 502,511 567,633 631,660 688,818 733,924 779,579 9.2
Note: See Table 3 for key forecast assumptions.

Source: IDC, 2008
18 #212231 ©2008 IDC

T ABLE 5
Worldwide HDD Revenue by Major Application, 2004–2012 ($M)
2007–2012
2004 2005 2006 2007 2008 2009 2010 2011 2012 CAGR (%)
Storage 3,070 3,960 4,303 5,156 5,499 5,344 5,606 6,387 7,368 7.4
systems
Entry servers 1,174 1,581 1,446 1,154 1,207 1,086 1,101 1,079 1,084 -1.3
Traditional 39 33 39 50 54 56 70 85 104 16.0

workstations
Desktop PCs 10,969 11,546 11,027 10,855 10,457 10,452 10,195 10,119 9,617 -2.4
Personal 446 1,333 2,080 3,458 4,443 5,870 6,911 8,199 9,798 23.2
storage
(DAS and
NAS)
Portable PCs 4,589 5,583 6,498 7,963 9,217 10,212 11,067 11,424 11,790 8.2
Consumer 2,710 3,728 4,203 3,756 4,196 4,432 4,645 4,786 4,990 5.8
electronics
Total 22,996 27,765 29,595 32,391 35,072 37,454 39,594 42,079 44,751 6.7

Source: IDC, 2008
IDC's forecast for HDD industry revenue growth could prove to be conservative
should HDD OEMs successfully develop and market new HDDs with additional
features and functionality for which they capture incremental value. Value-add
opportunities for HDDs include:
! HDD hardware-embedded data encryption
! Hybrid storage technology solutions that improve HDD performance at a lower

cost than full SSD solutions
! HDDs that reduce power consumption
! Form factors and/or design features tailored to specific applications — with the
caveat that subsequent shipment volumes provide an ROI for the program
development
©2008 IDC #212231 19

IDC's HDD revenue forecast comprises a mix of HDDs with features that capture an
associated price premium and standard HDDs. Historically, HDDs that ship with
value-add features are able to extract a price premium for several quarters at least.
We assume market and competitive dynamics in the future will exert price pressure
on many value-added features that eventually result in the features becoming
standard for a given disk drive. However, some HDD features that might result in
higher HDD bill of materials costs could result in a reset of ASPs for HDDs with these
capabilities. Hybrid HDD storage solutions provide a salient example where
combining nonvolatile flash semiconductor storage with an HDD and using
intelligence on the HDD to improve HDD and/or the host device performance might
boost BOM costs markedly. In this example, it is likely that HDD OEMs would extract
value for this capability with a price premium over standard HDDs for a prolonged
period of time. This forecast iteration reflects only a small percentage of hybrid HDD
solutions in future years. More research is underway to better understand the
capability of hybrid HDD solutions compared with other storage solutions. IDC's HDD
revenue forecast will be adjusted accordingly should hybrid HDD adoption
assumptions be revised.
When viewed from the perspective of terabytes shipped, a comparison of IDC's 2007
and 2008 HDD forecasts shows that annual HDD terabyte shipments are significantly
higher in this forecast iteration. By 2012, the HDD industry will ship nearly 400 million
terabytes, more than quadruple the 85 million terabytes shipped in 2007, to meet the
growing storage requirements of an expanding digital world.
Risks to Forecast
The biggest risk to HDD industry shipment and revenue growth comes from near-term
uncertainty over the prospects of the economies of key countries, especially the
United States. Macroeconomic trends in the United States are strongly correlated to
IT spending. A U.S. recession could impact IT spending negatively for an
indeterminate period of time, although the impact to IT spending, specifically on IT
hardware, is less clear. The depth and duration of slower economic growth in the
United States will likely be a key factor as to whether economies in other regions are
impacted negatively.
A U.S. recession in 2008 would be different when compared with recent U.S.
recessions. In recent recessions, U.S. homeowners were able to tap mortgage equity
withdrawals as a source of cash to prolong discretionary consumer spending. Given
that homeowners will be unable to tap mortgage equity in the present economic
environment, a contraction of U.S. discretionary consumer spending is likely.
Although more than 85% of worldwide HDD unit shipments and revenue are derived
from traditional compute markets, consumers do purchase a high percentage of
compute devices annually, including PCs and personal storage devices. The U.S.
Congress has taken measures to stimulate the U.S. economy with tax rebates.
Nevertheless, any slowing of discretionary consumer spending could have an
adverse impact on HDD demand for these markets, at least near term.
To a degree we believe storage growth, hence HDD demand, is somewhat mitigated

due to a weak macroeconomic environment. The cost of HDD storage on a price-per-
gigabyte basis continues to decline. As HDD storage becomes cheaper on a price-
per-gigabyte basis, it enables digital information to be captured and stored
20 #212231 ©2008 IDC

inexpensively and easily. This in turn results in faster content growth. This content
creation and storage cycle is likely to persist in the face of a challenging economic
spending environment. Further, from an acquisition cost perspective, the average
price of hard disk drives continues to decline while capacities are increasing.
Of equal importance to the potential economic impacts on the HDD forecast is

recognizing the potential for the capacity requirements of certain devices to be
satisfied using storage technologies other than HDDs, particularly portable PCs in
certain usage scenarios. In 2007, Asustek introduced the Eee PC, an ultraportable
PC with 4GB or 8GB of flash memory SSD storage. Asustek plans to sell 5 million
Eee PCs in 2008, with some models providing up to 20GB of SSD storage capacity.
The Asustek Eee PC provides an example where flash memory may provide good-
enough storage capacity for a mobile computing product. However, another point to
consider is that a certain percentage of mobile PCs, such as the Asustek Eee PC,
could be additive to the overall market, rather than a replacement purchase for a
traditional HDD-based mobile PC. IDC has accounted for devices such as the Eee
PC in its PC forecast assumptions and expects a relatively minimal impact of these
products on HDD shipments and revenue through 2012.
Several overarching assumptions specific to the hard disk drive industry underpin this
2007–2012 HDD forecast (for additional assumptions, refer back to the Assumptions
section).
Hard Disk Drive Technology
Ongoing research and development of HDD technology continues to enable new

HDD products with higher capacities and lower prices on a price-per-gigabyte basis.
HDDs also continue to deliver improved performance, better reliability, and richer
features. Advancement of HDD technology is the primary reason why the HDD
industry has been able to shrug off the challenge from competing storage
technologies for 50 years.
Perpendicular magnetic recording technology, first introduced on commercial HDD

products in 2005, is the latest HDD technology to make possible sustained areal
density advancements. Areal density increases allow for more data to be stored on
each disk, resulting in higher-capacity HDDs. PMR technology can also enable HDD
OEMs to ship a given drive with fewer components, although this dynamic has
lessened in recent years. PMR technology will enable areal density advancements of
approximately 40% per year through 2010. An improvement rate of 40% annually is
good, but it is less than the 100% annual areal density increases made possible by
the industry transition from magneto resistive (MR) to giant magneto resistive (GMR)
technology from 1998 to 2002. The speed for the HDD industry to transition from
GMR to PMR technology is about the same pace as the industry transition from MR
and thin film to GMR technology (see Figure 5).
We do not foresee any new HDD technologies in development now that will facilitate
HDD areal density growth rates greater than 40% per year. Conversely, after 2010 we
expect leading-edge HDD areal density growth rates will likely slow to less than 40%
per year. Figure 6 shows historical leading-edge HDD areal density products from
1998 to 2007 and IDC's assumptions for the highest commercialized areal density
HDD products through 2012.
©2008 IDC #212231 21

FIGURE 5
Worldwide PMR and GMR HDD Shipments Share of Total HDD

Shipments by Year After Technology Introduction
100
90
80
70
60
(%)
50
40
30
20
10
0
Year 1 Year 2 Year 3 Year 4
GMR
PMR
Source: IDC, 2008
FIGURE 6
Worldwide Commercialized HDD Leading Edge Areal Density,

1998–2007
300
250
200
(Gbits/in. )
2
150
100
50
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: IDC, 2008
22 #212231 ©2008 IDC

Several assist technologies will need to be used in conjunction with PMR technology
to realize HDD areal density growth beyond approximately 2010, and these are being
developed now. Owing to the cost to develop and deploy new HDD technologies, we
assume they will be avoided by HDD OEMs for as long as possible. Further, these
assist technologies will be employed first in HDD segments with the highest capacity
demands. As such, IDC's assumptions for areal density advancements vary by HDD
segment. Generally, we believe that mobile 1.8in. and mobile 2.5in. HDDs will adopt
PMR-assist technology first.
One example of an assist technology to PMR is dual-stage actuation (DSA, aka

second-stage actuation). Prior to the launch of PMR technology in 2005, DSA was
used on two HDD programs to extend longitudinal magnetic recording. Volume
production of both HDD programs that had used DSA technology were discontinued
in 2007. One of these programs used a load-beam-based DSA solution, while the
other used a co-located DSA approach. Although DSA is not presently used in high-
volume HDD programs, it is being investigated again as a solution on future HDD
programs.
The BOM cost adder for DSA technology is high. With DSA, there is a cost adder for
every read/write head used in the disk drive. IDC expects most HDD OEMs will seek
to design around DSA solutions for as long as possible.
There are other HDD technologies that have a lower additional BOM cost per drive
that may be adopted before 2012, but only for market segments that value the
additional capacity provided by the technology. Examples include discrete track
recording and/or bit patterned media. We expect commercial HDD products using
these technologies will be possible by 2010.
Hard Disk Drive ASP Erosion
From 2002 to 2006, blended average HDD prices declined year on year by an
average of about 8%. Year-on-year average HDD price erosion in 2007 was 5%. The
slower rate of price erosion was achieved by a mix shift of HDD shipments to higher
capacities and to smaller HDD form factors. These same market dynamics will
intensify during the period from 2007 to 2012, and they will help to maintain a slower
average rate of HDD price erosion across all form factors.
Competing Storage Technologies to Hard Disk Drives
NAND flash memory bit price erosion of 40–60% per year has made possible
displacement of virtually all small form factor HDDs that were once used in handheld
devices.
Flash chips are not only displacing SFF HDDs in handheld devices but are also
enabling the emergence of lower-cost solid state drives that will compete with
traditional HDDs in applications with low-capacity requirements. A modest reduction
of HDD demand for portable PCs in the later portion of the forecast period is
assumed.
©2008 IDC #212231 23

To a lesser degree (in terms of unit volume), SSDs will make an incursion into
traditional enterprise HDD markets. Certain compute applications that have intensive
input/output workloads may be better served by SSDs. SSDs have no moving parts,
whereas reading and writing data within HDDs requires positioning the read/write
head over a spinning disk. The inherent mechanical design of an HDD results in
some latency for reading and writing data. With an SSD, read latency is significantly
reduced, although write times in current SSD designs often take longer than HDDs.
The impact of SSDs in enterprise storage applications has been factored into this
HDD forecast. It should also be noted that SSDs within the enterprise could be
additive terabytes, as opposed to displacing traditional HDD terabytes. As such, we
believe NAND flash–based SSDs could also encroach on DRAM-based SSDs
leveraged in many of today's enterprise systems.
IDC continues to monitor several other nonvolatile storage technologies and does not
foresee development of any new storage technologies within the forecast period that
will threaten the market opportunity for HDDs.
Alternatively, HDD storage has the potential to displace magnetic tape in certain
storage usage models. This forecast does account for a relatively new application for
HDDs, removable hard disk drives (R-HDDs). R-HDDs are designed to replace
magnetic tape cartridges for data backup but not necessarily for data archiving.
Although data archiving is not normally associated with HDD storage, industry
participants are investigating HDD solutions that could provide a rotating magnetic
disk alternative to magnetic tape. The use of HDD storage instead of magnetic tape
for data archival could impact midline HDD storage demand negatively but increase
overall HDD demand positively. This forecast does not assume any significant or
deliberate incursion of HDD storage into traditional magnetic tape archival storage
markets.
HDD Market Overview

The sections that follow review IDC's HDD market forecast by major HDD markets or
consumption categories and by HDD form factor.
Enterprise Applications — Small and Speedy or Supersized?
The enterprise market is increasingly bifurcated between using capacity-optimized

(mainly ATA interface) and performance-optimized (SCSI/SAS/FC interface) HDDs.
Exceptions are beginning to surface where capacity-optimized HDDs are used to
achieve a high-performance storage solution. But solutions like this are unlikely to be
adopted broadly to an extent where there is a major displacement of performance-
oriented HDDs by capacity-optimized HDDs in storage systems.
Nevertheless, greater use of capacity-optimized drives in enterprise storage

applications does impact the demand for enterprise-class HDDs and is reflected in
IDC's forecast.
The majority of capacity-optimized HDD shipments through 2007 were 3.5in. form
factor products. IDC expects the HDD industry will introduce a 2.5in. form factor
capacity-optimized HDD in 2008, with three disks that are more tailored to rackmount
24 #212231 ©2008 IDC

environments. Although 3.5in. capacity-optimized HDDs for enterprise applications
will generally have two times the capacity of 2.5in. HDD products, the smaller 2.5in.
capacity-optimized HDDs will consume less power and space. This means it will also
take less power to cool the entire storage system or datacenter and that you can pack
more HDD units into the same amount of space. We expect qualification of 2.5in.
capacity-optimized HDDs tailored for rackmount environments will commence in
2009, with expanded adoption by storage systems customers in 2010.
The addition of new form factor HDDs for enterprise markets combined with a greater
variety of spin speeds and interfaces has served to reduce year-on-year price-per-
gigabyte erosion for performance-optimized enterprise-class HDDs. Table 6 shows
the year-on-year decline of the price per gigabyte for all enterprise-class HDDs. Note
the slowdown of price erosion since 2005.
Small form factor 2.5in. performance-optimized HDD shipments increased sharply in

2007 and will surpass 3.5in. performance-optimized HDD shipments by 2010.
Given that the demand for additional storage capacity by organizations (above a 50%
CAGR) exceeds the average capacity increase of HDDs (40%), HDD shipments to
enterprise applications will accelerate. IDC's forecast for HDD shipments to enterprise
applications by form factor is provided in Table 7.
T ABLE 6
Worldwide Enterprise-Class HDD Price per Gigabyte, 1998–2007
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Price per 57.66 32.88 16.08 9.92 6.13 3.81 2.38 1.85 1.44 1.16
gigabyte ($)
Growth (%) -42.4 -43.0 -51.1 -38.3 -38.2 -37.9 -37.6 -22.0 -22.1 -19.7
Source: IDC, 2008
©2008 IDC #212231 25

T ABLE 7
Worldwide HDD Shipments for Enterprise Applications by HDD Form Factor,

2007–2012 (000)
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Performance-optimized 21,232 20,006 16,997 13,958 11,163 8,948 -15.9

3.5in. (SCSI/SAS/FC) HDDs
Performance-optimized 8,701 12,298 16,153 21,371 29,416 36,040 32.9

2.5in. (SAS/FC) HDDs
Capacity-optimized 3.5in. 10,758 13,063 14,920 18,149 23,545 31,104 23.7

(SATA/SAS/FC) HDDs
Capacity-optimized 2.5in. 1,542 1,374 2,389 4,109 6,613 11,201 48.7

(SATA/SAS/FC) HDDs
Total 42,232 46,741 50,458 57,587 70,737 87,293 15.6

Source: IDC, 2008
PC Market — The Shift to Mobility and the Implication for HDDs
Personal computers remain the largest driver for HDD demand, accounting for more
than 60% of HDD unit shipments in 2007. From a revenue perspective, the PC
market contributed more than 50% of HDD industry revenue in 2007. The PC market
will continue to be an important market for the HDD industry through 2012, but
revenue from this market will only grow at a 2007–2012 CAGR of 2.6% (see Table 8).
As a result, the share of contribution of PC HDD revenue to overall HDD industry
revenue will decline. By 2012, less than 50% of HDD industry revenue will be derived
from both portable and desktop PC vendors. In spite of this decline, it will continue to
be the largest single market for HDDs.
Portable PCs remain a key driver of growth for the PC industry. Portable PC
shipments are expected to exceed desktop PC shipments for the first time in 2009. As
opposed to becoming more homogenous, portable PCs are morphing into a variety of
form factors, and users increasingly are buying portable PCs for entertainment or
industrial purposes.
Adoption of 1.8in. HDDs in portable PCs has been limited to only a few product
SKUs. Widespread adoption of 1.8in. HDDs in portable PCs has been held back by
the same factors that inhibit 2.5in. HDD adoption in desktop PCs: There is a price
penalty to obtain an identical capacity point HDD product, albeit in a smaller form
factor. Notwithstanding these inhibitors, 1.8in. HDDs do enable a smaller and lighter
portable PC. We expect PC buyers will place greater value on this purchase criterion
26 #212231 ©2008 IDC

in future years. In the meantime, 1.8in. HDDs for PC applications are possible with
capacities of up to 250GB in 2009 and 500GB by 2011. We believe the combination
of these factors could lead to steadily increasing shipments of 1.8in. form factor HDDs
for portable PCs throughout the forecast (see Table 9), with a caveat that ongoing
price pressure in PC markets could slow 1.8in. HDD adoption.
T ABLE 8
Worldwide HDD Shipments and Revenue for PC Applications, 2007–2012
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Shipments (000) 344,717 376,173 406,168 423,322 430,093 438,566 4.9
Revenue ($M) 18,817 19,674 20,664 21,262 21,543 21,407 2.6
Notes:
Shipment and revenue data includes comparatively small non-PC market device applications.
See Table 3 for key forecast assumptions.
Source: IDC, 2008
T ABLE 9
Worldwide HDD Shipments for Portable PCs by HDD Form Factor,

2007–2012 (000)
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Mobile 2.5in. 130,118 157,459 184,808 199,293 198,376 211,509 10.2
Mobile 1.8in. 1,692 3,711 6,402 11,162 16,858 16,780 58.2
Total 131,809 161,170 191,210 210,456 215,233 228,289 11.6
Notes:
Shipment data includes comparatively small non-PC market device applications.
Includes estimated annual HDD shipments for PC upgrades.
Source: IDC, 2008
©2008 IDC #212231 27

Concurrent with the trend toward mobility is the increasing risk of lost or stolen data.
Embedded disk drive encryption technology, including encrypted keys stored on the
disk drive, is likely to ship on a higher percentage of mobile 2.5in. HDDs over the next
several years.
PC OEMs are also seeking to improve the performance of portable PCs. SSD-based
PCs to date have failed to demonstrate enough of a noticeable boost in PC
performance to justify the enormous price premiums. The majority of mobile 2.5in.
HDDs used in portable PCs today have 5,400rpm spin speeds. Buyers can upgrade
to a 7,200rpm HDD at the time of purchasing the PC. The challenge for HDD OEMs is
to deliver improved performance with a 7,200rpm spin speed HDD without increasing
power consumption. IDC expects that 7,200rpm mobile HDDs will compose
approximately 8% of mobile 2.5in. HDD shipments to compute markets in 2008, up
from 5% in 2007.
Price and capacity will continue to be the most important considerations for HDD
purchases for desktop PC manufacturers. But increasingly, the desire for smaller,
cooler, and quieter-operating PCs could result in greater adoption of small form factor
HDDs designed for small spaces. Mobile 2.5in. HDDs have been designed into a
limited number of desktop PC SKUs, mainly PC blades or all-in-one designs where
the motherboard and LCD monitor are integrated as one component. Throughout the
forecast period, there will continue to be a price penalty for PC manufacturers to
migrate from a 3.5in. HDD to an identical capacity 2.5in. HDD.
Conversely, there is a capacity penalty when buying a mobile 2.5in. HDD at the same
price as desktop-class 3.5in. HDD. It is possible that commercial PC buyers might
seek to limit the capacity available on a desktop PC. A mobile 2.5in. HDD as opposed
to a desktop-class 3.5in. HDD is a means to this end. However, from an HDD OEM
perspective this would be a low-margin and unattractive market.
Another factor that has held back adoption of mobile 2.5in. HDDs in desktop PCs is
performance. Mainstream mobile 2.5in. HDDs spin at a 5,400rpm spin speed,
whereas mainstream desktop-class HDDs spin at a 7,200rpm spin speed. Presently,
7,200rpm mobile 2.5in. HDDs are available, but at a price premium over equivalent
capacity 5,400rpm products. For PC OEMs, the 7,200rpm HDD is an upsell
opportunity, and one that IDC expects PC OEMs (and certain HDD OEMs) will want
to maintain as long as possible. For these reasons, we do not foresee a transition of
mobile 2.5in. to 7,200rpm as mainstream. This dynamic will serve as an inhibitor for
mobile 2.5in. HDD incursion into desktop PC markets.
There is one wild card that could be a potential catalyst for mobile 2.5in. HDD
adoption in desktop PCs: regional regulations that prescribe limits to overall PC
power consumption. Even without regulations, voluntary compliance with green
standards could act as a market driver. We are aware that such regulations have
been discussed, but they are not imminent. Therefore, we assume increased usage
of mobile 2.5in. HDDs in desktop PCs will be driven mainly by transitions to certain
desktop PC form factors as opposed to other factors (see Table 10).
28 #212231 ©2008 IDC

T ABLE 10
Worldwide HDD Shipments for Desktop PCs by HDD Form Factor,

2007–2012 (000)
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Desktop-class 3.5in. 211,122 210,099 203,287 191,678 183,767 176,548 -3.5
Mobile 2.5in. 1,786 4,904 11,671 21,188 31,092 33,729 80.0
Total 212,908 215,003 214,958 212,866 214,859 210,277 -0.2
Notes:
Shipment data includes comparatively small non-PC market device applications.
Includes estimated annual HDD shipments for PC upgrades.
Incursion of mobile 2.5in. HDDs into the desktop market is assumed to be at lower-capacity points and will utilize primarily
1-disk, 1-head HDD configurations.
Source: IDC, 2008
Personal Storage — The 2007–2012 HDD Growth Engine
The personal storage market continues to grow rapidly. Personal storage devices are
one of the few product categories that incorporate nearly every HDD form factor,
except for performance-optimized enterprise-class form factors. The personal storage
market also creates an interesting sales channel for HDD OEMs. Because the
responsibility for the quality of new HDDs for personal storage products lies solely
with the HDD OEMs, lengthy customer qualification cycles can be avoided. This gives
HDD OEMs the option to ramp production of new, higher-capacity HDDs quickly.
Underpinning IDC's optimism for growth of the personal storage device market is the
relatively low percentage of homes and small businesses/small offices worldwide with
both a PC and a personal storage device (see Figure 7). We believe consumers are
finally realizing the need for personal data protection.
©2008 IDC #212231 29

FIGURE 7
Worldwide Personal Storage Device Installed Base Share of

Home and Small Business/Small Office PC Installed Base,
Years
45
40
35
30
25
(%)
20
15
10
5
0
2007 2008 2009 2010 2011 2012
Source: IDC, 2008
But personal data protection is only one driver of higher personal storage device unit
demand. Consumers increasingly are also using personal storage devices simply to
store more digital media and data. For example, Western Digital announced in 2007 a
personal storage product designed to attach to a TiVo PVR via an external SATA
(eSATA) interface. IDC expects steady growth of personal storage unit shipments for
these use cases and applications. We also expect personal storage devices used to
store digital media are likely to have very high storage capacities, given the expected
growth of high-definition video content.
The number of terabytes shipped with personal storage devices exceeded the
number of terabytes shipped to enterprise applications in 2006. By 2010, annual
personal storage terabyte shipments will reach nearly two times the terabyte
shipments into enterprise storage applications.
Going forward, IDC expects the market for personal storage devices will include a
higher percentage of multiple-HDD configurations. IDC's HDD forecast reflects this
trend with a 2007–2012 CAGR of 27% for HDDs shipping to the personal storage
market (see Table 11).
30 #212231 ©2008 IDC

T ABLE 11
Worldwide HDD Shipments for Personal Storage Devices by HDD Form Factor,
2007–2012 (000)
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Mobile 1.xin. 727 721 813 1,050 1,200 2,000 22.4
Mobile 2.5in. 10,503 21,190 37,802 58,525 77,589 91,880 54.3
Desktop-class 3.5in. 32,373 40,262 45,689 47,553 48,127 47,752 8.1
Total 43,602 62,173 84,304 107,128 126,916 141,632 26.6

Source: IDC, 2008
Consumer Electronics Products — All About Video
Digital video recorder/personal video recorder devices remain a strong demand

category for HDDs. The PVR market subsegments include standalone devices such
as the well-known TiVo box and set-top boxes supplied by cable and satellite
providers. A relatively new category for PVR storage is download-and-burn devices.
These devices enable downloading movies to the PVR, where it is cached for a fixed
period of time for users to view. But it also allows consumers to burn the downloaded
movie to a DVD for an additional fee. Standalone download-and-burn devices will
compete against PCs equipped with DVD writers and users that "sneakernet" the
DVD to a DVD player. Hence, we believe the PC will likely win the battle against
download-and-burn devices.
The living room is reaching an inflection point where many potential storage solutions
could exist to cache or store video content for consumers. At the same time, the
number of paths for digital video to reach the living room are increasing with satellite,
cable, and Internet Protocol television (IPTV) service providers all providing options to
access video content in addition to traditional terrestrial broadcast signals. Higher-
capacity PVRs are one potential scenario. Another is for personal storage devices to
be attached to PCs to hold many hours of IPTV content.
Another wildcard is for game console manufacturers to integrate IPTV capabilities into
game consoles.
Longer term, IDC is watching the advancements of streaming and time-shifting video
content at the head end in the service provider's facility. The concept of a network
DVR is technically an option to caching content locally in the home, but is inhibited
mainly by copyright and quality of service issues. Near term, local caching onto a
hard drive is likely to remain a standard practice to avoid legal entanglements and to
ensure an acceptable quality of service level. Long term, as broadband continues to
become more pervasive and reliable, the ability to watch live video streams from the
©2008 IDC #212231 31

head end (as opposed to locally stored content) increases. If copyright issues can be
eliminated, the long-term reality could be televisions with HDD cache integrated into
the actual television set, as opposed to having a discrete STB. This way, <pause>,
<rewind>, and <fast forward> become functions of the TV remote control. This
scenario would serve to reduce local storage requirements, but it could increase unit
demand for HDDs to be embedded in the display. Moreover, given the requirement to
keep TVs cool and quiet, embedding the HDD in the TV display could boost demand
for either mobile 2.5in. HDDs or desktop-class 3.5in. HDDs that spin slower, use less
power, and generate less heat.
Approximately 80% of HDDs shipping to the PVR/DVR market today are 1-disk, 3.5in.
ATA products. STB manufacturers seek to minimize BOM costs while providing as
much capacity available from a 1-disk solution. Even with growing penetration of
HDTV in households worldwide, IDC expects 1-disk HDDs will continue to make up
nearly 80% of HDDs shipping to PVR markets. Table 12 provides the 2007–2012
forecast for HDD shipments to PVR applications by HDD form factor. Note that IDC
does not include HDD shipments for video surveillance applications in its forecast for
HDD shipments to PVR applications.
T ABLE 12
Worldwide HDD Shipments for Consumer Electronics Applications, 2007–2012

(000)
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Set-top box/PVR/DTV 32,052 39,022 44,374 52,178 57,356 61,959 14.1
Mobile phones/PDAs/SHDs 71 – – – – – NA
Game consoles/HHs 15,663 20,554 23,425 27,448 31,729 32,090 15.4

games
Auto/Nav/PND 4,301 4,811 6,004 7,433 9,178 10,100 18.6
Digital cameras/ 3,137 5,356 6,068 6,564 6,527 5,933 13.6

camcorders
Digital audio/PMPs 16,736 12,803 10,858 7,158 2,348 2,006 -34.6
Total 71,960 82,546 90,730 100,781 107,138 112,088 9.3

Source: IDC, 2008
32 #212231 ©2008 IDC

Game consoles will continue to drive solid HDD demand, primarily for mobile 2.5in.
HDDs. Microsoft offers a HDD with certain Xbox 360 SKUs and as an add-on option,
while Sony incorporates an HDD in 100% of its PS3 consoles.
Higher-capacity HDDs are expected to be attached to game consoles in future years,

especially if game console manufacturers begin to include IPTV functionality in future
generations of game consoles.
Increasingly, automobiles will have in-dash infotainment systems that provide audio,
video, and navigation information to passengers. Several automotive OEMs now offer
factory-installed HDD-based navigation or infotainment systems, but these systems
typically are available only in high-end model vehicles; thus, the overall volume to
automotive OEMs is relatively low.
The majority of HDDs shipped for automotive applications are mobile 2.5in. HDDs. A
growing percentage of the HDDs shipping for automotive applications are ruggedized
to meet demanding temperature, humidity, and vibration requirements.
There is a strong potential for SSD adoption in the automotive market in future years,
as a substitute for HDDs, especially as prices for SSDs fall. SSDs are well suited for
automotive market requirements for several reasons. SSDs can withstand a much
wider temperature and humidity range than HDDs and are more resistant to shock
and vibration. By 2010, SSDs will be available at lower, but sufficient, capacity points
for most automotive storage requirements. Further, like most other automobile
components, SSD prices for a given capacity point can fall over long periods of time.
In comparison, HDD vendors transition to higher capacity-per-platter products that
provide more capacity at about the same ASP over time.
IDC believes SSD adoption in automotive systems will curtail HDD usage in
automotive applications, and this is reflected in IDC's outlook.
Somewhat surprisingly, Samsung introduced a 1.3in. HDD in 2007 for portable CE

devices. Volume production of 1.3in. form factor HDDs will depend heavily on
adoption by a few key customers. IDC expects the 1.3in. form factor HDD will provide
a slight price-per-gigabyte advantage for a few years, but not after 2011. Accordingly,
IDC is forecasting relatively low volumes for 1.3in. HDD shipments and ceasing in
2011 as this form factor succumbs to attractive flash memory pricing by that time.
IDC's forecast for HDD revenue for CE devices and applications is provided in Table
13.
©2008 IDC #212231 33

T ABLE 13
Worldwide HDD Revenue for Consumer Electronics Applications, 2007–2012 ($M)
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Set-top box/PVR/DTV 1,619 1,951 2,145 2,391 2,595 2,789 11.5
Mobile phones/PDAs/SHDs 5 – – – – – NA
Game consoles/HHs 674 874 998 1,409 1,575 1,444 16.4

games
Auto/Nav/PND 219 202 244 300 370 404 13.0
Digital cameras/ 186 284 314 335 321 267 7.6

camcorders
Digital audio/PMPs 1,053 884 731 434 110 86 -39.4
Total 3,756 4,196 4,432 4,870 4,972 4,990 5.8

Source: IDC, 2008
HDD Form Factor Outlook

Shipment of mobile 2.5in. HDDs will surpass desktop-class 3.5in. HDDs by 2010 and
will represent 50% of total HDD shipments by 2012. Mobile 2.5in. HDD shipments
represented 33% of total HDD unit shipments in 2007.
The HDD form factor with the fastest 2007–2012 CAGR is 2.5in. enterprise-class
HDDs. Unit shipments are expected to increase from 8.7 million units in 2006 to 36.0
million units in 2012, a CAGR of 33%.
We expect 3.5in. desktop-class HDD shipments will remain relatively flat. Demand
from PC markets will decline but will be offset by growth from PVR, enterprise market,
and personal storage markets.
Tables 14–20 detail IDC's HDD forecast and associated assumptions by HDD form
factor.
34 #212231 ©2008 IDC

T ABLE 14
Worldwide Mobile-Class 1.0in. and 1.3in. HDD Analysis, 2007–2012
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Shipments (000)
4–4.9GB 46.0 – – – – – NA
5–5.9GB – – – – – – NA
6–7.9GB 111.0 – – – – – NA
8–9.9GB 389.0 – – – – – NA
10–11GB 8.0 – – – – – NA
12–14GB 130.0 – – – – – NA
15–19GB – – – – – – NA
20–29GB – – – – – – NA
30–39GB 0.1 676.5 484.7 – – – NA
40–49GB – 431.6 1,119.3 – – – NA
50–59GB – – 150.0 150.0 – – NA
60–79GB – – 161.6 1,551.2 204.0 – NA
80–99GB – – – 155.7 956.2 – NA
Total 684.1 1,108.1 1,915.6 1,856.9 1,160.3 – NA
Revenue ($M) 37 57 97 93 56 – NA
ASP ($) 54 51 51 50 48 – NA
Terabyte shipped (000) 6 38 77 113 89 – NA
Average 1.0in. or 1.3in. HDD 8 34 40 61 76 – NA

capacity shipped (gigabyte)
Notes:
1.0in. HDD shipments ceased in 2007.
Samsung introduced a 1.3in. form factor HDD in 2007, and will likely be the only supplier.
Virtually all shipments in 2007 were 1.0in. form factor products.
All shipments from 2008 onward are assumed to be 1.3in. form factor only.
Source: IDC, 2008
©2008 IDC #212231 35

T ABLE 15
Worldwide Mobile-Class 1.8in. HDD Analysis, 2007–2012
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Shipments (000)
20–29GB 480 – – – – – NA
30–39GB 8,527 1,097 – – – – NA
40–49GB 1,330 1,148 161 – – – NA
50–59GB 2,302 1,732 1,029 250 – – NA
60–79GB 6,992 10,049 6,280 2,481 278 – NA
80–99GB 326 273 – – – – NA
120–159GB 22 1,077 4,178 6,267 4,691 2,217 152.3
160–179GB 1,070 5,051 9,082 11,249 10,153 6,201 42.1
180–199GB – – – – – – NA
200–239GB – – – – 557 297 NA
240–299GB – 8 529 2,557 7,337 8,793 NA
300–399GB – – 64 349 1,714 7,351 NA
400–499GB – – – – – – NA
500–599GB – – – – 181 1,237 NA
600–699GB – – – – – 26 NA
Total 21,049 20,434 21,323 23,153 24,912 26,121 4.4
Revenue ($M) 1,315 1,329 1,361 1,418 1,522 1,598 4.0
ASP ($) 62 65 64 61 61 61 -0.4
Terabyte shipped (000) 1,223 1,953 2,678 3,516 4,795 6,503 39.7
Average 1.8in. HDD capacity 58 96 126 152 192 249 33.8

shipped (gigabyte)
Notes:
CE applications will predominately use 3,600rpm 1.8in. HDDs to reduce power consumption.
PC applications will predominately use 5,400rpm 1.8in. HDDs to achieve acceptable PC performance.
The 1.8in. form factor will be an early adopter of new HDD technologies to ship 500GB and higher capacity products.
Source: IDC, 2008
36 #212231 ©2008 IDC

T ABLE 16
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Shipments (000)
20–29GB 4,834 1,850 – – – – NA
30–39GB 2,766 787 – – – – NA
40–49GB 15,640 4,918 1,719 330 – – NA
50–59GB 14,653 8,691 2,723 772 – – NA
60–79GB 40,824 26,530 19,325 10,225 4,815 1,304 -49.8
80–99GB 3,843 – – – – – NA
120–159GB 45,668 60,778 32,475 19,209 11,104 2,704 -43.2
160–179GB 34,519 73,357 92,973 67,811 37,188 24,369 -6.7
180–199GB – – – – – – NA
200–239GB 3,622 670 – – – – NA
240–299GB 6,492 36,753 86,133 108,183 106,152 103,491 74.0
300–399GB 428 8,855 35,799 83,673 112,785 108,711 202.7
400–499GB 1 63 375 1,231 5,800 9,803 528.4
500–599GB 0 1,246 13,929 49,861 102,427 150,524 1,146.6
600–699GB – 1 393 2,149 5,006 8,495 NA
700–999GB – – 24 1,451 6,560 13,194 NA
1.0–1.49TB – – 227 1,173 4,063 19,749 NA
>=1.5TB – – – – – 438 NA
Total 173,290 224,500 286,095 346,068 395,900 442,782 20.6
©2008 IDC #212231 37

T ABLE 16
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Revenue ($M) 9,670 11,909 14,764 17,371 19,698 22,357 18.2
ASP ($) 59 56 55 53 54 55 -1.3
Average 2.5in. HDD 110 157 214 279 343 412 30.2
Notes:
All figures include 2.5in. capacity-optimized HDDs for enterprise applications.
2.5in. capacity-optimized HDDs for enterprise applications will be predominately 3-disk configurations.
2.5in. capacity-optimized HDDs for enterprise applications may employ either SATA or SAS interfaces.
A higher percentage of HDD shipments will be >5,400rpm spin speed products over the forecast period.
SATA will be the predominate interface used on 2.5in. HDDs for portable PC and other applications.
Source: IDC, 2008
T ABLE 17
Worldwide Desktop-Class 3.5in. HDD Analysis, 2007–2012
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Shipments (000)
40–49GB 4,281 – – – – – NA
50–59GB 624 – – – – – NA
60–79GB 88,983 46,483 12,132 3,326 – – NA
80–99GB – – – – – – NA
120–159GB 2,004 – – – – – NA
160–179GB 78,986 89,239 69,880 38,470 15,707 6,662 -39.0
180–199GB – – – – – – NA
200–239GB 1,774 1,026 – – – – NA
240–299GB 40,657 69,321 91,756 97,736 87,663 76,442 13.5
38 #212231 ©2008 IDC

T ABLE 17
Worldwide Desktop-Class 3.5in. HDD Analysis, 2007–2012
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
300–399GB 28,469 29,439 38,568 37,215 31,837 17,142 -9.6
400–499GB 4,460 1,527 492 – – – NA
500–599GB 29,169 47,947 64,003 79,200 93,114 102,014 28.5
600–699GB 5 331 1,463 3,997 7,166 4,450 288.9
700–999GB 5,417 8,384 8,295 7,434 6,998 6,328 3.2
1.0–1.49TB 1,316 7,889 18,639 34,330 52,420 73,883 123.8
>=1.5TB – – 100 2,074 6,845 14,807 NA
Total 286,146 301,585 305,330 303,782 301,750 301,729 1.1
Revenue ($M) 16,254 16,386 16,195 15,711 15,520 15,327 -1.2
ASP ($) 57 54 53 52 51 51 -2.2
Average 3.5in. HDD 215 278 351 438 545 668 25.5
Notes:
All figures include 3.5in. capacity-optimized HDDs for enterprise applications.
3.5in. capacity-optimized HDDs for enterprise applications may employ SATA, SAS, or Fibre Channel interfaces.
Approximately 80% of desktop-class 3.5in. HDDs for PVR applications will be single disk products.
Approximately 60% of desktop-class 3.5in. HDDs for desktop PC applications will be single disk products.
SATA will be the predominate interface used on 3.5in. HDDs for desktop PC and other applications.
Source: IDC, 2008
©2008 IDC #212231 39

T ABLE 18
Worldwide Enterprise-Class 2.5in. HDD Analysis, 2007–2012
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Shipments (000)
30–39GB 614 692 – – – – NA
60–79GB 4,402 3,758 2,723 772 – – NA
120–159GB 3,685 7,614 8,523 8,211 5,681 2,704 -6.0
300–399GB – 234 4,906 11,793 19,501 24,236 NA
400–499GB – – – 595 4,234 8,744 NA
600–699GB – – – – – 357 NA
Total 8,701 12,298 16,153 21,371 29,416 36,040 32.9
Revenue ($M) 1,362 1,699 2,095 2,625 3,471 4,020 24.2
ASP ($) 107 406 1,410 2,077 2,759 3,326 98.7
Terabyte shipped (000) 887 1,491 2,925 5,068 8,591 11,817 67.8
Average 2.5in. Enterprise 102 121 181 237 292 328 26.3
HDD capacity shipped
(gigabyte)
Notes:
The highest capacity 10,000rpm 2.5in. enterprise-class HDD in 2010 will be 450GB.
The highest capacity 15,000rpm 2.5in. enterprise-class HDD in 2010 will be 150GB.
15,000rpm 2.5in. enterprise-class HDD volumes will remain less than 20% of annual shipments.
SAS will be the predominate interface used on enterprise-class 2.5in. HDDs.
Source: IDC, 2008
40 #212231 ©2008 IDC

T ABLE 19
Worldwide Enterprise-Class 3.5in. HDD Analysis, 2007–2012
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Shipments (000)
30–39GB 589 – – – – – NA
60–79GB 6,102 1,694 285 – – – NA
120–159GB 8,662 8,011 4,621 1,601 322 – NA
300–399GB 5,744 8,312 7,477 5,324 3,858 1,240 -26.4
400–499GB 135 1,864 2,350 2,836 2,790 3,063 86.7
600–699GB – 125 2,264 4,197 4,192 4,645 NA
Total 21,232 20,006 16,997 13,958 11,163 8,948 -15.9
Revenue ($M) 3,746 3,692 2,942 2,376 1,811 1,449 -17.3
ASP ($) 176 185 173 170 162 162 -1.7
Average 3.5in. HDD 166 233 314 403 446 507 25.1
Notes:
The increase of the ASP in 2008 reflects a strong shift to 15,000rpm spin speed and higher capacity HDDs.
The highest capacity 10,000rpm and 15,000rpm 3.5in. enterprise-class HDD in 2010 will be 600GB.
A higher percentage of HDD shipments will be 15,00rpm spin speed over the forecast period.
Source: IDC, 2008
©2008 IDC #212231 41

T ABLE 20
Worldwide HDD Shipments by Capacity Range, 2007–2012: All HDD Form Factors
2007–2012
2007 2008 2009 2010 2011 2012 CAGR (%)
Shipments (000)
<5GB 156 – – – – – NA
5–9.9GB 500 – – – – – NA
10–19GB 138 – – – – – NA
20–29GB 5,314 1,850 – – – – NA
30–39GB 11,882 2,560 485 – – – NA
40–49GB 21,251 6,498 3,150 480 – – NA
50–59GB 23,682 12,117 4,198 2,574 60 – NA
60–79GB 136,799 83,061 37,738 16,188 5,233 1,304 -60.6
80–99GB 4,169 273 – – – – NA
120–159GB 56,355 69,866 41,274 27,077 16,117 4,921 -38.6
160–179GB 114,576 167,647 171,935 117,530 63,047 37,232 -20.1
180–199GB – – – – – – NA
200–239GB 5,396 1,697 – – 557 297 -44.0
240–299GB 47,148 106,083 178,417 208,476 201,153 188,726 32.0
300–399GB 34,641 46,606 81,908 126,561 150,195 134,444 31.2
400–499GB 4,596 3,453 3,217 4,067 8,590 12,865 22.9
500–599GB 29,169 49,193 77,932 129,060 195,722 253,775 54.1
600–699GB 5 458 4,121 10,343 16,364 17,616 412.1
700–999GB 5,417 8,384 8,319 8,885 13,558 19,522 29.2
1.0–1.49TB 1,316 7,889 18,866 35,503 56,482 93,633 134.6
>=1.5TB – – 100 2,074 6,845 15,245 NA
Total 502,511 567,633 631,660 688,818 733,924 779,579 9.2
Note See Table 3 for key forecast assumptions.

Source: IDC, 2008
42 #212231 ©2008 IDC

Market Context
A comparison of IDC's 2007 and 2008 HDD market forecasts reveals a unit delta
between the two forecasts representing higher unit growth rate and revenue
assumptions resulting primarily from updated PC and personal storage forecasts that
are generating stronger HDD demand (see Table 21 and Figure 8). For document
containing the previous forecast, see Worldwide Hard Disk Drive 2007–2011 Forecast
Update (IDC #209583, November 2007).
T ABLE 21
Worldwide HDD Shipments and Revenue, 2005–2012: Comparison of 2007 and

2008 Forecasts
2005 2006 2007 2008 2009 2010 2011 2012
Shipments (000)
2008 forecast 380,736 435,878 502,511 567,633 631,660 688,818 733,924 779,579
2007 forecast 380,736 435,878 496,943 557,783 609,907 646,407 679,849 NA
Revenue ($B)
2008 forecast 27.76 29.59 32.39 35.08 37.45 39.59 42.08 44.75
2007 forecast 27.76 29.59 32.08 35.53 37.70 39.04 40.22 NA
Note: See Worldwide Hard Disk Drive 2007–2011 Forecast Update (IDC #209583, November 2007) for prior forecast.
Source: IDC, 2008
©2008 IDC #212231 43

FIGURE 8
Worldwide HDD Shipments and Revenue, 2005–2012:

Comparison of 2007 and 2008 Forecasts
900 50
800 45
700 40
35
Shipments (M)
Revenue ($B)
600
30
500
25
400
20
300 15
200 10
100 5
0 0
2005 2006 2007 2008 2009 2010 2011 2012
2008 shipment forecast

2007 shipment forecast
2008 revenue forecast
2007 revenue forecast
Source: IDC, 2008
When viewed from the perspective of terabytes shipped, a comparison of IDC's 2007
and 2008 HDD market forecasts shows that annual HDD terabyte shipments are
significantly higher in this forecast iteration. By 2012, the HDD industry will more than
quadruple the total HDD capacity shipped in 2007 to meet the growing storage
requirements of an expanding digital world. HDD capacities are increasing in part due
to demand, and in part because HDD industry dynamics "incentivize" HDD OEMs to
race to the next HDD capacity point and effectively reset pricing for a drive with a
fixed number of components.
ESSENTIAL GUIDANCE
HDD industry participants should consider the following:
! Expect continued expansion of the digital world. At the same time, expect
that storage requirements will become increasingly diverse for hard disk drives.
Increasingly, value will be placed on HDDs that deliver improved capacity and
performance, data security, and lower power consumption. Refocus and
repurpose research and development resources accordingly.
44 #212231 ©2008 IDC

! Diversify HDD product offerings for profitability. The enterprise-class HDD
segment provides a good example where developing new HDD form factors and
providing a greater variety of interfaces and spin speeds to meet changing
market requirements can slow HDD price-per-gigabyte erosion. Equally important
is leveraging existing HDD platforms whenever possible to increase component
commonality.
! Plan for increasing seasonality of HDD demand from the first half to the
second half of a given calendar year. Even with core, traditional HDD markets,
the trend for greater seasonality from the first half to the second half of the
calendar year is growing. Resist the temptation to add capacity to meet peak
demand in the second half of a given calendar year that culminates in aggressive
pricing to fill factories in seasonally slow quarters. This will ensure more fully
utilized assets year round and better overall HDD pricing and revenue.
! Remain vigilant to SSD developments. But realize that the price of SSDs
through at least 2010 will inhibit SSD adoption and the markets that are less
price sensitive are quite small; hence, the incursion of SSDs into current HDD
markets will be minimal. Conversely, HDD OEMs should consider leveraging
HDD technology into SSD solutions and adding SSDs to the existing portfolio of
HDD storage products in the future.
LE ARN MORE
Related Research
! Worldwide Hard Disk Drive Quarterly: CY 4Q07 Summary and Outlook (IDC
#211571, March 2008)
! Worldwide Removable Hard Disk Drive 2008–2012 Forecast and Analysis: The
Quest for a Viable Tape Replacement (IDC #210169, January 2008)
! Worldwide Storage 2008 Top 10 Predictions: New Paradigms (IDC #209796,

December 2007)
! Worldwide Digital Camcorder Storage 2007–2011 Forecast (IDC #209603,

November 2007)
! Worldwide Hard Disk Drive 2007–2011 Forecast Update (IDC #209583,

November 2007)
! PC Component and System Demand Exceeds Expectations for Two Quarters in

a Row: Explanation, Meaning, and Outlook (IDC #209353, November 2007)
! Worldwide Solid State Drive 2007–2011 Forecast and Analysis: Finding Space in
the Expanding Digital Universe (IDC #207739, July 2007)
! The Future of Storage in Commercial PCs: A Commercial PC Buyer Survey and

Study (IDC #207697, July 2007)
! Worldwide Hard Disk Drive 2007–2011 Forecast and Analysis: Creating Space
for an Expanding Digital Universe (IDC #206701, May 2007)
©2008 IDC #212231 45

Definitions
Areal Density
Areal density (AD) is a measurement of recording density calculated by multiplying
tracks per inch (tpi) by bits per inch (bpi), usually denoted in gigabits per square inch
(Gb/sq. in.).
Average Sales Price or Average Unit Price

Average unit price (AUP) is the midyear average OEM/distributor price estimate paid
for quantity (1,000+) contracts.
Hard Disk Drives

These are single- or multiple-platter, factory-sealed, magnetic data storage devices
with disk diameters of 3.5in., 2.5in., 1.8in., 1.0in., and 0.85in. They typically have an
OEM value from $30 to $500.
Current and historical products that meet these criteria include the following:
! The 5.25in. drive reached its end of life in 1999.
! The 3.5in. drives typically range in capacity from 40GB to 1TB from vendors such
as Seagate, Western Digital, Hitachi GST, Samsung, and Excelstor.
! The 2.5in. drives typically range in capacity from 20GB to 500GB from vendors
such as Hitachi GST, Toshiba, Fujitsu, Samsung, Seagate, and Western Digital.
! The 1.8in. drive capacities currently range from 20GB to 160GB from Toshiba,
Hitachi, Seagate, and Samsung.
! The 1.3in. drive was introduced by Samsung in 2007 and will begin to ship in
volume in 2008.
Disks/Platters
These HDD components, also referred to as "media" or "disk media," are rigid
substrates currently made from aluminum and glass (or glass ceramic). They are
polished and magnetically coated through a sputtering/deposition process. The
magnetic head in the disk drives writes and reads data on each side of a disk. Drive
capacities are sometimes referred to as gigabytes per platter (GB/platter), which is
the total capacity that can be stored by writing to both sides of the platter.
Hard Disk Drive Gigabytes and Terabytes

3
The capacity of 1GB is 1,073,741,824 bytes, or 1,024 bytes. Conventionally, a byte
is 8 bits of information. The capacity of 1TB is 1,000GBs.
46 #212231 ©2008 IDC

3
Most HDD manufacturers define 1GB as 1,000,000,000 bytes, or 1,000 bytes. This
can create confusion regarding the actual capacity of an HDD. The actual available
capacity of an HDD is often presented to the host system at slightly less than the
HDD OEM's stated capacity of the disk drive. The reason is the host system will often
3 3
calculate the size of the hard drive by dividing by 1,024 bytes instead of 1,000 bytes.
As the capacity of a given HDD increases, the difference between the stated capacity
of an HDD device and the capacity presented to the host device can also increase.
We recognize this potential to overstate gigabytes and terabytes.
To further confuse matters, the actual capacity of a given HDD is often higher than
what is presented to the host system. In addition to storing user data, the HDD stores
header and error correction code data with each byte of user data. Further, spare
blocks or addresses are often supplied within a given disk drive. These spare blocks
are made available by the HDD controller only in a situation where certain areas of
the disk surface (originally designated blocks) are deemed unusable at some point in
time after the HDD is shipped. In such cases, leveraging the spare blocks preserves
the original capacity of the HDD.
To maintain consistency with other areas of IDC research, all data and figures in this
study, including terabytes shipped, reflects the stated capacity of HDDs as shipped
and defined by HDD OEMs.
Performance-Optimized HDDs
This category includes hard disk drives in one of two form factor sizes:
! Large form factor (LFF): 3.5in. (25.4 x 101.6 x 146 mm)
! Small form factor (SFF): 2.5in. (15 x 69.85 x 100.45 mm)
These HDDs typically have spin speeds ≥10,000rpm and are designed for ≥1.2
million hours mean time between failure (MTBF), or ≤0.62% annual failure rate (AFR)
under 24 x 7 always-on 50%-50% read/write operation. Additionally, these drives
typically have native command queuing for a variety of enterprise ecosystem
demands; rotational vibration sensors and controls to operate effectively in rackmount
environments; and either a parallel SCSI, Serial Attached SCSI (SAS), or Fibre
Channel interface.
Capacity-Optimized HDDs
This category includes hard disk drives in one of two form factor sizes:
! Large form factor: 3.5in. (25.4 x 101.6 x 146 mm)
! Small form factor: 2.5in.(exact dimensions not standard yet within the industry)
These HDDs typically have spin speeds <10,000rpm and are designed for ≥1.2
million hours mean time between failure, or ≤0.75% annual failure rate under 24 x 7
always-on 50%-50% read/write operation. In practice, however, these HDDs are
typically used more in 80%-20% read/write applications. Increasingly, these drives
typically have native command queuing for a variety of enterprise ecosystem
©2008 IDC #212231 47

demands and rotational vibration sensors and controls to operate effectively in
rackmount environments. Most often, these drives are equipped with a Serial ATA
(SATA) interface. However, capacity-optimized HDDs for enterprise applications on
occasion may have either a SAS or a Fibre Channel interface, usually by specific
customer request.
Server Blades
Simply put, this is the motherboard of a 1U, rack-optimized server turned 90 degrees
so that its width is vertical (around 6U). Several servers could be stacked horizontally
(as opposed to vertically) within a rack, thus consuming considerably less space. In
turn, each server blade could potentially have one or more HDD mounted to the
blade. It is likely that solid state drives will increasingly be used instead of an HDD on
server blades.
Solid State Drives

A solid state drive (SSD) is a semiconductor-based block storage device that behaves
as a virtual HDD and appears to the host device as a disk drive. The SSD form factor
may be similar to a standard HDD form factor, enabling the SSD, in many cases, to
be a drop-in replacement for an HDD. SSDs are connected to the host device,
including servers or SANs, via standard interfaces such as parallel SCSI, Serial
Attached SCSI, Fibre Channel, and parallel and serial ATA interfaces.
Unit Shipments
Unit shipments measure sales by supplier through all distribution channels (e.g.,
OEM, distributor, VAR/VAD, captive, and retail). Units are counted as they are
recognized as revenue by the HDD supplier. Unit shipments are in thousands in this
document, unless otherwise denoted.
Value of Shipments
The value of shipments is the product of unit shipments and midyear AUP, also
referred to as revenue.
IDC System Classifications
Traditional Computing Applications
Enterprise Storage Systems
This system platform basically equates to the combination of entry servers and
multiuser systems. Included in this segment are storage systems having more than
three drives and potentially hundreds of disk drives integrated into them. Price points
can be less than $1,000 to more than $1 million. Multiuser storage systems can either
be internal to the server or externally attached as either a storage area network (SAN)
or as a network-attached storage (NAS) appliance.
This segment also includes what were traditionally called entry servers — servers
priced at less than $25,000. The entry server segment includes PC servers as a
subset. PC servers are distinct from desktop systems being used as servers. They
48 #212231 ©2008 IDC

are products designed specifically to be used as servers. These servers typically
have enhanced system buses, extra space for multiple disk drives, and redundant
hardware components. They are predominantly Intel architecture (x86) servers priced
at less than $25,000, but a few models will exceed this pricing band when fully
configured.
Portable PCs
Portable PCs (also referred to as PC notebooks or mobile PCs) as defined in this

study represent two categories: mobile and ultramobile. Both these categories of
devices have an Intel architecture (x86, including compatibles) microprocessor and
are designed primarily as portable single-user devices. They are capable of
supporting attached peripherals and are programmable in high-level languages that
can run an off-the-shelf PC operating system such as Windows. Within these two
categories of portable PCs are numerous form factors defined within IDC's PC
taxonomy. A brief example of two portable PC form factors follows:
! Thin-and-light notebooks encompass the largest portion of the PC market with

12.x to 15.x size screens. The vast majority of thin-and-light notebooks are
equipped with a 2.5in. HDD.
! Transportable PCs have screens 17in. and larger, are marketed as desktop PC
replacements, and are meant to be more mobile than portable. The storage
requirements for transportable PCs are generally higher than they are for other
notebook categories, and some models include more than one HDD.
Other categories of portable PCs include mini notebooks, tablet PCs, and a variety of
other configurations. Today, most portable PC form factors incorporate a mobile
2.5in. HDD.
Desktop PCs
A desktop PC has an Intel architecture (x86, including compatibles) microprocessor

and is designed primarily as a single-user device. It is capable of supporting attached
peripherals and is programmable in high-level languages that can run an off-the-shelf
PC operating system such as Windows. Again, IDC's PC analyst team has defined
several categories of desktop PCs in its taxonomy. The taxonomy includes several
categories of towers, all-in-one configurations, and PC blades. A PC blade is similar
to a server blade but is designed to support a single user equipped with an
input/output device remote from the datacenter (refer back to the server blades
definition).
Personal Storage Devices
IDC defines a personal storage device as a hard disk drive–based storage solution
that is external to a host device and that is connected via a variety of interfaces,
including USB, 1394 (FireWire), CompactFlash, eSATA, or wireless. This category
includes the following:
! Personal DAS. This is a personal storage device that is directly attached to or

controlled by a host device (hence the name direct-attached storage, or DAS).
The storage device is accessed only via the host device to which it is attached,
©2008 IDC #212231 49

but it could be shared with other devices or users on a LAN. The device may be
stationary or portable. The device may contain one or more HDDs and may have
RAID functionality — although IDC believes the vast majority of personal DAS
devices will contain only one HDD. The host device could be a computer or even
a personal video recorder (PVR). In this application, it is frequently referred to as
a sidecar. PVR sidecars will be captured in IDC's personal storage HDD forecast.
! Personal NAS. A personal NAS device is a storage device that is directly

attached to a network, is controlled by the user (hence the name network-
attached storage, or NAS), and supports only file storage. It is not to be confused
with IDC's enterprise storage taxonomy, which defines NAS as an external disk
storage system that attaches to a LAN, communicates at a file level, and
contains an internal operating system optimized for file serving. Enterprise NAS
devices are widely recognized to have a sophisticated software layer of
management tools that accompany the device for successful integration into
datacenter processes. In contrast, a personal NAS device is intended to be
simple for a user to set up and operate. It does provide storage access for
multiple users on a network, but with limited functionality. Personal NAS devices
can have more than one HDD but often incorporate one high-capacity HDD.
Connectivity is typically via Ethernet, although the potential for personal NAS
devices with capability to support multiple simultaneous wireless access points is
likely.
Traditional Workstations
Generally, traditional workstations offer the following features: Unix or OpenVMS

operating systems; direct sales channels supplemented by OEM and VAR distribution
channels; and various applications emphasizing technical, graphics, and networked
business/professional application segments. Further:
! Traditional workstations include all of those in which Unix is the primary operating
system. Many traditional workstations can run Windows operating systems;
however, the workstations were originally designed for Unix and are targeted at
that market. These products are included in the traditional workstations category.
! Personal workstations are counted in the personal computer segment. These

systems typically represent a combination of PC economics and the functionality
found in a traditional workstation. These systems are usually NT based.
Industrial/Commercial Applications
Several applications exist for hard disk drives outside of traditional computing
applications. Examples include printers, miscellaneous office equipment, and a wide
range of industrial and medical equipment. Owing to the relatively small volumes
shipped to these markets, IDC has subsumed the forecast for these devices into the
aftermarket HDD shipments for traditional computing markets.
50 #212231 ©2008 IDC

Consumer Electronics
Digital Video Applications
This is a broad category name (a superset) that includes the following devices, as
well as digital TV (DTV) and high-definition TV (HDTV):
! Personal video recorders (PVRs). These products use local storage to enable
the user-controlled storage and playback of live digital video streams on a real-
time basis. Core functionality includes the ability to simultaneously record and
play back separate video streams or different portions of the same stream in real
time. Most products also use programming information to allow deterministic and
proactive recording of television shows, but this feature is not required. The most
common application of PVRs is in the area of television broadcast control. PVR
products are also referred to as digital video recorders (DVRs). Some HDTV and
DTV sets may include some of the functionality of PVRs, and thus some will
include hard drives. Long term, we expect many PVR-type systems to integrate
audio jukebox capabilities.
! Set-top boxes. These devices act as receivers/tuners for television signals or

service access. In most systems, they also control access to premium channels
and provide other features such as pay per view (PPV). Owing to technical
differences in the way video is transmitted, there are separate set-top boxes for
cable and satellite systems. A class of set-top boxes that will allow consumers to
receive DTV signals, decoding them for display on analog sets, is also emerging,
and some of these will likely include local storage.
Automotive Applications
IDC has defined two automotive application segments for systems likely to adopt an
HDD, in-vehicle installations (can be done in the factory, or aftermarket):
! Automotive OEM-installed in-vehicle navigation/telematics/infotainment

systems. These devices are typically installed in-dash by the OEM and have a
wide range of capabilities depending on the functionality bundled with the system.
The most common in-vehicle device today with an embedded HDD is one
designed for navigation applications. Over time, it's expected that these systems
will have greater functionality to provide navigation, point-of-interest information,
and individualized entertainment to each seat within the vehicle. Later in the
forecast period, it's assumed telematics and diagnostic capabilities will be added to
systems, pushing storage requirements higher. Telematics capabilities refer to
communications between the installed system and other devices to provide
additional navigation functionality. Diagnostic information is data recorded while the
vehicle is in operation to assist with maintenance. It is assumed that primarily 2.5in.
HDDs will be used for in-dash systems through most of this forecast period.
! Aftermarket in-vehicle navigation/telematics/infotainment systems.

Generally, these are nearly identical to units shipped with a new vehicle but often
have slightly fewer features. These systems are less likely to have telematics
capabilities, hence storage requirements for these units could stagnate and
eventually fall within the realm of economical SSD capacities.
©2008 IDC #212231 51

Portable navigations devices (PNDs) had at one time incorporated HDDs for storage.
PNDs are small, portable handheld devices with GPS functionality and software to
display navigational information. The small size of the PND makes it useful for all
forms of travel. The migration to 3D maps in several geographies worldwide have
driven PND storage requirements higher, but the storage requirements are low
enough to be within the economical capacities of flash storage. It is assumed in IDC's
outlook that all PNDs will ship with flash memory storage in future years.
Digital Camcorders
Digital Camcorders are available with several options for storage on the device. It is
assumed that a growing percentage of digital camcorders will adopt HDD storage.
Camcorders will mainly utilize 1.8in. form factor HDDs, but 1.3in. HDDs will also be
used.
Portable Media Players
These compressed audio and video devices have rapidly growing storage capacities,
particularly devices oriented toward portable video consumption. Nevertheless, the
rapid decline of the price of NAND flash storage combined with smaller file sizes
associated with compressed media files is resulting in fewer opportunities for HDD
storage. Additionally, embedded NAND flash storage in portable media players
makes possible smaller and lighter devices that are more robust to shock events and
extreme temperatures. It is assumed in IDC's outlook that a rapidly growing
percentage of portable media players will ship with flash memory storage in future
years.
Appendix: HDD Shipments and Revenue,

2006–2012
Tables 22 and 23 show HDD shipments and revenue by HDD form factor and
consumption category.
52 #212231 ©2008 IDC

T ABLE 22
Worldwide HDD Shipments Analysis: Consumption by HDD Form Factor,

2006–2012 (000)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
0.85in.
Traditional
Enterprise storage – – – – – – – NA
applications
Desktop PCs – – – – – – – NA
Personal storage 80 30 – – – – – NA
(external DAS and
NAS)
Portable PCs – – – – – – – NA
CE
Set-top box/PVR/DTV – – – – – – – NA
Mobile phones/PDAs/ 1,210 71 – – – – – NA

SHDs
Game consoles/HHs – – – – – – – NA
games
Auto/Nav/PND – – – – – – – NA
Digital cameras/ – – – – – – – NA
camcorders
Digital audio/PMPs 21 9 – – – – – NA
Total 1,311 110 – – – – – NA
1.0in. and 1.3in.
Traditional
applications
Personal storage 630 403 300 300 300 200 – NA

(external DAS and
NAS)
©2008 IDC #212231 53

T ABLE 22

2006–2012 (000)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
CE
Mobile phones/PDAs/ 987 – – – – – – NA

SHDs
games
Auto/Nav/PND 205 77 – – – – – NA
Digital cameras/ 71 – 808 1,616 1,557 960 – NA

camcorders
Digital audio/PMPs 2,091 205 – – – – – NA
Total 3,984 684 1,108 1,916 1,857 1,160 – NA
1.8in.
Traditional
applications
Personal storage 494 294 421 513 750 1,000 2,000 46.7
(external DAS and
NAS)
Portable PCs 1,976 1,692 3,711 6,402 11,162 16,858 16,780 58.2
CE
Mobile phones/PDAs/ – – – – – – – NA
SHDs
Game consoles/ – – – – – – – NA
HHs games
Auto/Nav/PND 1,331 218 73 525 825 1,237 1,408 45.2
54 #212231 ©2008 IDC

T ABLE 22

2006–2012 (000)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
Digital cameras/ 1,678 3,137 4,547 4,452 5,007 5,566 5,933 13.6
camcorders
Digital audio/PMPs 18,825 15,708 11,682 9,430 5,409 250 – NA
Total 24,303 21,049 20,434 21,323 23,153 24,912 26,121 4.4
2.5in. ATA
Traditional
Enterprise storage 657 1,542 1,374 2,389 4,109 6,613 11,201 48.7
applications
Desktop PCs 1,639 1,786 4,904 11,671 21,188 31,092 33,729 80.0
Personal storage 4,206 10,503 21,190 37,802 58,525 77,589 91,880 54.3
(external DAS and
NAS)
Portable PCs 94,945 130,118 157,459 184,808 199,293 198,376 211,509 10.2
CE
Set-top box/PVR/DTV 336 761 1,616 3,688 6,431 11,553 16,037 84.0
SHDs
Game consoles/HHs 14,585 15,663 20,554 23,425 27,448 31,729 32,090 15.4
games
Auto/Nav/PND 3,640 4,007 4,738 5,479 6,608 7,940 8,692 16.8
camcorders
Digital audio/PMPs 1,028 212 368 680 1,096 1,591 1,605 50.0
Total 121,036 164,590 212,202 269,943 324,697 366,484 406,742 19.8
3.5in. ATA
Traditional
©2008 IDC #212231 55

T ABLE 22

2006–2012 (000)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
Enterprise storage 7,564 10,758 13,063 14,920 18,149 23,545 31,104 23.7
applications
Desktop PCs 202,144 211,122 210,099 203,287 191,678 183,767 176,548 -3.5
(external DAS and
NAS)
CE
Set-top box/PVR/DTV 27,366 31,291 37,406 40,686 45,747 45,803 45,923 8.0
SHDs
games
camcorders
Digital audio/PMPs 536 603 754 747 654 507 401 -7.8
Total 257,598 286,146 301,585 305,330 303,782 301,750 301,729 1.1
2.5in. ENT
(SAS/SCSI/FC)
Traditional
applications
Personal storage – – – – – – – NA
(external DAS and
NAS)
56 #212231 ©2008 IDC

T ABLE 22

2006–2012 (000)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
CE
SHDs
games
camcorders
Digital audio/PMPs – – – – – – – NA
Total 2,433 8,701 12,298 16,153 21,371 29,416 36,040 32.9
3.5in. ENT
(SAS/SCSI/FC)
Traditional
Enterprise storage 25,212 21,232 20,036 16,997 13,958 11,163 8,948 -15.9
applications
(external DAS and
NAS)
CE
SHDs
games
©2008 IDC #212231 57

T ABLE 22

2006–2012 (000)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
camcorders
Total 25,212 21,232 20,036 16,997 13,958 11,163 8,948 -15.9
All form factors
Traditional
applications
Desktop PCs 203,783 212,908 215,003 214,958 212,866 214,859 210,277 -0.2
(external DAS and
NAS)
Portable PCs 96,921 131,809 161,170 191,210 210,456 215,233 228,289 11.6
CE
Set-top box/PVR/DTV 27,702 32,052 39,022 44,374 52,178 57,356 61,959 14.1
Mobile phones/PDAs/ 2,197 71 – – – – – NA

SHDs
Game consoles/HHs 14,585 15,663 20,554 23,425 27,448 31,729 32,090 15.4
games
Auto/Nav/PND 5,176 4,301 4,811 6,004 7,433 9,178 10,100 18.6
Digital cameras/ 1,749 3,137 5,356 6,068 6,564 6,527 5,933 13.6
camcorders
Digital audio/PMPs 22,501 16,736 12,803 10,858 7,158 2,348 2,006 -34.6
Total 435,878 502,511 567,664 631,660 688,818 734,884 779,579 9.2
Source: IDC, 2008
58 #212231 ©2008 IDC

T ABLE 23
Worldwide HDD Revenue Analysis: Consumption by HDD Form Factor,

2006–2012 ($M)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
0.85in.
Traditional
applications
Personal storage 5.9 2.1 – – – – – NA

(external DAS and
NAS)
CE
Mobile phones/PDAs/ 94.3 4.9 – – – – – NA

SHDs
games
camcorders
Digital audio/PMPs 1.6 0.6 – – – – – NA
Total 101.8 7.6 – – – – – NA
1.0in. and 1.3in.
Traditional
applications
Personal storage 35.7 22.5 18.1 16.8 14.0 9.4 – NA

(external DAS and
NAS)
©2008 IDC #212231 59

T ABLE 23

2006–2012 ($M)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
CE
Mobile phones/PDAs/ 56.0 – – – – – – NA

SHDs
games
Auto/Nav/PND 11.5 4.2 – – – – – NA
Digital cameras/ 4.1 – 38.5 80.1 79.1 46.6 – NA

camcorders
Digital audio/PMPs 114.2 10.2 – – – – – NA
Total 221.5 36.9 56.5 96.9 93.0 56.0 – NA
1.8in.
Traditional
applications
Personal storage 37.3 18.9 26.8 33.9 50.1 69.1 151.3 51.6
(external DAS and
NAS)
Portable PCs 124.4 104.8 223.8 405.8 714.6 1,098.9 1,115.8 60.5
CE
SHDs
games
Auto/Nav/PND 87.4 10.0 3.8 27.0 43.6 60.6 63.9 44.9
60 #212231 ©2008 IDC

T ABLE 23

2006–2012 ($M)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
Digital cameras/ 96.8 185.6 245.7 234.0 256.4 274.7 267.3 7.6
camcorders
Digital audio/PMPs 1,206.3 996.0 828.7 660.1 353.7 18.3 – NA
Total 1,552.3 1,315.4 1,329.0 1,360.9 1,418.3 1,521.6 1,598.3 4.0
2.5in. ATA
Traditional
Enterprise storage 45.1 84.3 74.6 145.8 258.0 448.0 805.7 57.1
applications
Desktop PCs 99.4 95.5 267.7 631.4 1,110.5 1,631.3 1,748.8 78.9
Personal storage 312.2 709.4 1,409.0 2,761.6 3,877.1 5,024.4 6,566.5 56.1
(external DAS and
NAS)
Portable PCs 6,373.5 7,858.0 8,993.4 9,806.2 10,352.1 10,324.7 10,674.1 6.3
CE
Set-top box/PVR/DTV 22.2 33.3 75.4 172.1 284.7 503.1 710.5 84.4
SHDs
Game consoles/HHs 697.9 674.4 874.4 997.9 1,184.4 1,389.7 1,444.1 16.4
games
Auto/Nav/PND 220.7 205.1 198.4 217.3 256.4 308.9 339.9 10.6
camcorders
Digital audio/PMPs 67.7 9.5 16.0 31.4 48.2 68.2 67.4 48.0
Total 7,838.7 9,669.6 11,908.9 14,763.8 17,371.3 19,698.5 22,356.9 18.2
©2008 IDC #212231 61

T ABLE 23

2006–2012 ($M)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
3.5in. ATA
Traditional
Enterprise storage 714.0 1,167.5 1,293.4 1,304.2 1,518.4 1,820.3 2,281.2 14.3
applications
Desktop PCs 10,927.4 10,759.1 10,188.9 9,820.9 9,084.5 8,487.9 7,868.1 -6.1
Personal storage 1,688.5 2,705.3 2,988.6 3,057.8 2,969.7 3,096.0 3,080.2 2.6
(external DAS and
NAS)
CE
Set-top box/PVR/DTV 1,486.9 1,585.9 1,876.0 1,973.3 2,106.6 2,092.1 2,079.0 5.6
SHDs
games
camcorders
Digital audio/PMPs 35.0 36.5 39.2 39.1 31.7 23.9 18.5 -12.7
Total 14,851.9 16,254.3 16,386.2 16,195.3 15,710.9 15,520.2 15,327.0 -1.2
2.5in. ENT
(SAS/SCSI/FC)
Traditional
Enterprise storage 405.5 1,362.1 1,699.0 2,094.7 2,625.0 3,471.4 4,019.8 24.2
applications
(external DAS and
NAS)
62 #212231 ©2008 IDC

T ABLE 23

2006–2012 ($M)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
CE
SHDs
games
camcorders
Total 405.5 1,362.1 1,699.0 2,094.7 2,625.0 3,471.4 4,019.8 24.2
3.5in. ENT (SAS/

SCSI/FC)
Traditional
Enterprise storage 4,623.1 3,745.6 3,695.9 2,942.1 2,375.6 1,811.3 1,449.3 -17.3
applications
(external DAS and
NAS)
CE
SHDs
games
©2008 IDC #212231 63

T ABLE 23

2006–2012 ($M)
2007–
2012
CAGR
2006 2007 2008 2009 2010 2011 2012 (%)
camcorders
Total 4,623.1 3,745.6 3,695.9 2,942.1 2,375.6 1,811.3 1,449.3 -17.3
All form factors
Traditional
Enterprise storage 5,787.8 6,359.5 6,762.9 6,486.8 6,777.0 7,551.0 8,556.0 6.1
applications
Desktop PCs 11,026.7 10,854.6 10,456.6 10,452.3 10,195.0 10,119.2 9,616.9 -2.4
Personal storage 2,079.7 3,458.1 4,442.5 5,870.2 6,910.9 8,198.9 9,798.0 23.2
(external DAS and
NAS)
Portable PCs 6,497.9 7,962.8 9,217.2 10,212.0 11,066.6 11,423.6 11,789.9 8.2
CE
Set-top box/PVR/DTV 1,509.1 1,619.2 1,951.4 2,145.4 2,391.3 2,595.2 2,789.4 11.5
Mobile phones/PDAs/ 150.3 4.9 – – – – – NA

SHDs
Game consoles/HHs 697.9 674.4 874.4 997.9 1,184.4 1,389.7 1,444.1 16.4
games
Auto/Nav/PND 319.6 219.3 202.3 244.3 300.0 369.5 403.8 13.0
Digital cameras/ 101.0 185.6 284.2 314.1 335.5 321.3 267.3 7.6
camcorders
Digital audio/PMPs 1,424.9 1,052.9 883.9 730.6 433.6 110.4 85.9 -39.4
Total 29,594.8 32,391.5 35,075.5 37,453.7 39,594.1 42,078.9 44,751.3 6.7
Source: IDC, 2008
64 #212231 ©2008 IDC

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©2008 IDC #212231 65

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MARKET AN ALYSIS

Worldwide Hard Disk Drive 2008–2012 Forecast and

per-gigabyte basis enables digital information to be captured and stored

! HDD markets least threatened by competing storage technologies such as

! Successive generations of HDD products using perpendicular magnetic

Filing Information: May 2008, IDC #212231, Volume: 1

#212231 ©2008 IDC

©2008 IDC #212231

#212231 ©2008 IDC

©2008 IDC #212231 1

Hard Disk Drive Demand Drivers

Computing markets, including personal storage devices, will continue to be a

2 #212231 ©2008 IDC

Worldwide Average Price per Gigabyte of HDD Storage,

Source: IDC, 2008

Hard Disk Drive Industry Structure

! SAE, a subsidiary of TDK. TDK's primary HDD-related business is the design

©2008 IDC #212231 3

! Union Technology Company (UTC), Thailand. UTC is a subsidiary of Saha-Union

Seagate completed its acquisition of Maxtor in 2006 and subsumed Maxtor's

Vertical integration does enable operational efficiencies. Vertically integrated

4 #212231 ©2008 IDC

Worldwide Estimated HDD Industry TAM, 2008

Source: IDC, 2008

©2008 IDC #212231 5

Worldwide Ownership by HDD OEMs of Key HDD Component

Source: IDC, 2008

6 #212231 ©2008 IDC

Worldwide Ownership by HDD OEMs of Key HDD Component

Source: IDC, 2008

©2008 IDC #212231 7

Shipments Share Shipments Share 2006–2007 Change in

Seagate* 139,175 31.9 175,734 35.0 26.3 -1.6

Maxtor* 20,117 4.6 – – -100.0 NA

Western Digital 84,745 19.4 113,243 22.5 33.6 3.1

Hitachi 70,015 16.1 89,443 17.8 27.7 1.7

Samsung 47,654 10.9 47,816 9.5 0.3 -1.4

Toshiba 40,461 9.3 37,570 7.5 -7.1 -1.8

Fujitsu 29,820 6.8 35,918 7.1 20.5 0.3

Excelstor 2,821 0.6 2,752 0.5 -2.4 -0.1

Cornice 967 0.2 35 0.0 -96.4 -0.2

GS Magicstor 104 0.0 – – -100.0 0.0

Total 435,878 100.0 502,511 100.0 15.3

* Seagate includes Maxtor share in 2006.

8 #212231 ©2008 IDC

Revenue Share Revenue Share 2006–2007 Change in

Seagate* 10.33 34.9 12.28 37.9 18.9 -1.7

Maxtor* 1.40 4.7 – – -100.0 NA

Western Digital 4.90 16.6 6.60 20.4 34.5 3.8

Hitachi 4.87 16.5 5.56 17.2 14.1 0.7

Samsung 2.53 8.5 2.84 8.8 12.6 0.2

Toshiba 2.77 9.3 2.34 7.2 -15.6 -2.1

Fujitsu 2.61 8.8 2.66 8.2 1.9 -0.6

Excelstor 0.12 0.4 0.11 0.3 -2.5 0.0

Cornice 0.06 0.2 0.00 0.0 -96.2 -0.2

GS Magicstor 0.01 0.0 – – -100.0 0.0

Total 29.59 100.0 32.39 100.0 9.5

* Seagate includes Maxtor share in 2006.

Forecast and Assumptions

©2008 IDC #212231 9

Economy IDC assumes that worldwide Moderate. A potential

Policy Compliance is still driving some High. Compliance spending

10 #212231 ©2008 IDC