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Hard drives sales under pressure

With demand squeezed by PC weakness and SSD cannibalisation, Gartner forecasts global hard drive shipments will post a 2.9% CAGR from 2013-2018, growing from 552 million units to 635.1 million. High-capacity business-critical drives as used by Web/cloud service providers, are expected to fuel much of the industry's growth by delivering a 25.1% CAGR.

With demand squeezed by PC weakness and SSD cannibalisation, Gartner forecasts global hard drive shipments will post a 2.9% CAGR from 2013-2018, growing from 552 million units to 635.1 million. High-capacity business-critical drives as used by Web/cloud service providers, are expected to fuel much of the industry's growth by delivering a 25.1% CAGR.

Western Digital's new Helium drives are aimed in large part at this segment. The market for high-margin performance-optimised drives, where Seagate has a strong position, is expected to see a -4.9% CAGR, Gartner says. In addition, the segment's ASP is expected to fall 17.1% annually. PC drives are a mixed bag as sales of 3.5" desktop drives are expected to see a -7% CAGR, but 2.5" mobile/notebook drives are seen growing at a 4.2% annual clip. CAGR forecasts for 2.5" and 3.5" consumer electronics drives are respectively at 4.4% and 2.4%.

Though both Seagate and Western Digital have launched SSDs, WD has been more aggressive at increasing its flash exposure, as evidenced by the sTec, VeloBit, and Virident deals. Seagate is looking to strengthen its hard drive position through the just-closed Xyratex acquisition. Both firms are pitching 5mm-thin ultra-slim hard drives as an alternative to notebook SSDs.