When it comes to the hard drive industry, there has rarely been an example of more cutthroat competition, price drops, mergers and hard-toothed business practices in a single industry. There were over 70 hard drive companies in the late 70s and 80s -- and now you can count the number of companies on a couple of hands. Good reading on this subject is The Innovator's Dilemma.With industry leader Seagate Technology (NYSE:STX) buying competitor Maxtor in 2004, there are now just a few companies in this space -- Seagate, Hitachi, Western Digital, Samsung, Toshiba and some smaller players. What the market forgets sometimes is that the Internet, DVRs, iPods, and a myriad of other things could not exist without the hard drive -- it has the cost, speed and flexibility to meet these products' demands.
But hold your applause -- while Seagate CEO Bill Watkins says that traditional hard drive technology may be co-existing with Flash technology (chips, not spinning disks), Sandisk Corp. (NASDAQ:SNDK) has released a flash-based hard drive for use in laptops and other similar devices. Will flash-based storage technology ever be as cheap and flexible as those spinning drives inside the PC you're reading this post on? Who knows -- except maybe Sandisk and memory leaders like Hynix and Samsung. By 2010, we'll probably see if co-existence or replacement of one technology with another happens. Place your bets.
[Disclosure: I own STX shares as of 1-4-06]
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Reader Comments (Page 1 of 1)
1-05-2007 @ 5:32PM
Henry Singer said...
I think it's only a matter of time before the mechanical hard drive completely disappears from the personal computer. It is nothing short of amazing to think that while CPU speeds have increased by an order of magnitude from what they were just a few years ago (speeds of today's advanced chips are far greater than some of the million dollar supercomputers back in the '80's). Yet, in spite of that, the key storage device relies on a technology that, no matter how sophisticated and how dense the data is stored, it is still based on Thomas Edison's rotating disk machine of almost 100 years ago. As the only moving part [aside from the cooling fan(s)] of most PC's, it is probably responsible for 95% of machine failures (when was the last time you heard of a CPU chip failure??).
Replacing that antiquated holdback to Edison's days is long overdue. Already, there are flash memory chips in the 2 gigabyte range, about where a "big capacity" hard drive was 6 years ago. Since then, storage capacity has increased about 100-fold while prices have dropped significantly. I think it is only a matter of time before flash memory's capacity is similarly increased and the price drops accordingly. Then, the reliability of most PC's will be so dramatic, that today's hard drive will go the way of the vinyl record, and to that, I say, good riddance.