Leading industry watchers like IDC and Gartner early this year predicted that the first quarter of 2016 would not be good for the PC industry and various companies agreed with that. The reasons for the declines are well known: global economic issues, the slowdown in China, the strong U.S. dollar as well as competition from smartphones and other devices. As sales of PCs were not strong as predicted, this negatively affected the hard drive market.

According to Gartner, PC shipments worldwide totaled 64.8 million units in the first quarter of 2016, a decrease of 9.6% from Q1 2015. The company notes that this was the first time since 2007 that shipment volume fell below 65 million units. Analysts from IDC are even more pessimistic because based on their findings, shipments of PCs in the first quarter totaled 60.6 million units, a year-over-year (YoY) drop of 11.5%. As we noted in our previous coverage of the HDD market earlier this year, the decline of HDD shipments in 2015 significantly outpaced the regress of the PC market. As it appears, the same happened in the first quarter of 2016 as the total available market of hard drives dropped to a new multi-year low.

Shipments of HDDs Total 99.8 Million Units in Q1 2016

Seagate, Toshiba and Western Digital, the three remaining producers of HDDs, shipped a total of 99.8 million hard drives in Q1 2016, or 20% less than in the same period a year ago according to their estimates (see counting methodology below). According to estimates from Nidec, the company that sells the majority of small precision motors for HDDs (over 80% of them, based on its own estimates), the industry sold 98 million hard drives in Q1, but it is worth noting that Nidec is typically very conservative. In the same quarter of last year, Seagate, Toshiba and Western Digital sold 125 million HDDs, whereas just six years ago the industry shipped 163 million units. In fact, even in Q1 2006, sales of HDDs totaled 101.7 million units, according to iSuppli (via EDN), which means that we might be talking about a 10-year low in hard drives shipments.

Sales of PCs in general (and hard drives in particular) are seasonally not strong in the first quarter of the year, which is why it is not surprising that they declined to around 100 million units from 115 million units in Q4 2015. What is alarming is that despite this seasonal change, Q1 2015 shipments of HDDs were higher than sales of hard drives in each of the remaining quarters last year. If this year follows the same negative pattern, then HDD shipments will be below 100 million units in the second quarter and will remain below that level in the second half of the year. Western Digital estimates that total available market (TAM) of HDDs will decline to 95 million units in the second quarter, which means a decline of around 15% from the same period last year. A moderately good news is that Western Digital seems to be optimistic about the second half and believes that HDD TAM will remain above 400 million units mark in 2016 (compared to 456 million units in 2015), which means that shipments of hard drives will grow in calendar Q3 and calendar Q4. IDC has asserted that inventory reductions, cautious buying and other additional elements of the equation that directly affected makers of components in the recent quarters are wrapping up, Western Digital’s optimism could well be justified.

Market Share: Seagate, WD and Toshiba Shipments
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  • nandnandnand - Thursday, May 12, 2016 - link

    Don't trust the cloud! It's meant to shackle and spy on you!
  • Wolfpup - Thursday, July 14, 2016 - link

    It's also way too slow, way too unreliable, and way, way, way too limited by bandwidth caps.
  • tamalero - Tuesday, May 17, 2016 - link

    Makes you wonder if most companies will just switch to corporate/business storage devices in the end. And leave the SSDs for consumer market.
  • Achaios - Thursday, May 12, 2016 - link

    I upgraded my Dec 2013 rig last mont.

    One of the upgrades, was replacing the two WD Green 2TB drives in Raid 1 I had with two WD Blue 6 TB drives also placed in Raid 1.

    This will set me up for the next 5-6 years, so presumably I won't be buying any more HDD's until then.

    My rig uses a Samsung 840 EVO 500 GB SSD as an OS/Games drive and a Samsung 750 120GB SSD (upgrade) as an emergency boot drive/virtual memory drive.

    I think I am all set until the next major upgrade event. Don't think I will be buying any more storage (SSD or HDD) for the next 5 years or so.
  • bill.rookard - Thursday, May 12, 2016 - link

    Agreed. I just updated my NAS with some 4TB enterprise drives (3x4TB in RAID5) and retired my 5x2TB RAID5 array. Same overall size, but vastly increased reliability and I should be good for a few years.

    Meanwhile all my new builds are SSD based.
  • TheinsanegamerN - Thursday, May 12, 2016 - link

    SSDs are big enough now that most users dont need HDDs anymore.

    Even for gamers, the richer ones can afford all SSD storage. My laptop has a 256 and 512GB SSDs in it, and I feel no squeeze for space, just install the games you actually play. And if more space is needed, 2TB SSDs exist now. I doubt many gamers need more than 2TB of games downloaded at any one point.

    Which leaves media creation and one of the few that still need HDDs, although that may change. Outside of backup devices, HDDs dont have much of a future in consumer devices.
  • DanNeely - Thursday, May 12, 2016 - link

    Agreed; however the problem is that most consumers don't understand that SSDs will make their laptop much more responsive; and that the lack of spinning rust is the biggest reason why their phone and tablet are so much more responsive. 3/4ths of PCs are still crippled with HDDs and sold to customers who only understand two numbers: Total price, less is always better here. Number of GB, more is always better here. If they don't actually need the disk space, and most don't, they're wrong about the latter; but you can't fight ignorance at the boxmart.

    Just checking prices for new name brand laptop HDDs on Newegg shows the price margin between 1TB drives and smaller ones has almost completely vanished: 250 GB, $39; 320 GB, $45, 500 GB, $45; 1TB $52; 2 TB, $94. Just based on how far 1 TB laptop drives have dropped in price I'm not surprised that Seagate's discontinuing their smaller capacity drives; WD and Toshiba will probably end up doing the same within a year.

    At the same time the cheapest ~960GB SSD on Newegg is still $200, with $50 only getting you 240GB. That's enough of a price/capacity gap to keep the majority of the clueless with legacy storage for at least a few more years.
  • TheinsanegamerN - Thursday, May 12, 2016 - link

    Very true, but the kind of people that dont understand SSDs are probably the same kind of people that want the most GBs because they think it will make the computer faster. Nothing will help them I'm afraid.

    But then, the cheap junk they usually buy gets the scrap parts anyway, the good lines of HDDs always went into business machines and stuff with a higher margin. That market is falling in love with SSDs very quickly.
  • FunBunny2 - Thursday, May 12, 2016 - link

    -- But then, the cheap junk they usually buy gets the scrap parts anyway, the good lines of HDDs always went into business machines and stuff with a higher margin.

    and the same thing is happening in the SSD space.
  • DanNeely - Thursday, May 12, 2016 - link

    Technically illiterate customers looking at the only number they think they understand and wanting HDDs was my point. Excluding those willing to pay a little extra for a stylish thin laptop I don't see that changing any time soon because the price per GB difference is still way too large.

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