Apple's decision to quit using hard disk drives in its popular iPod will have a considerable impact on the 1-inch hard disk drive market, market research firm The Information Network said.
An increasing number of mobile applications such as MP3 players, PDAs, digital still cameras, and digital video cameras are pushing 1-inch hard disk drive (HDD) shipments, the New Tripoloi, Penn.-based researcher said. But the loss of the iPod Mini will be felt in 2006, according to the market researcher.
"Apple strength in the MP3 market will alter the course of the HDD market for 2005 and 2006," Robert N. Castellano, president of The Information Network, said in a statement. "Apple had a 20 percent share of the MP3 market and a 59 percent share of the HDD-based MP3 market in 2004."
Unit shipments of 1-inch HDDs initially forecast to increase from 8.7 million units in 2004 to 23.2 million in 2005, will now increase to only 20.2 million units in 2005, the market researcher said. Furthermore, shipments of 1-inch HDDs, initially forecast to increase to 37 million units in 2006, will instead drop to 19.8 million units, according to The Information Network.
"We estimate that Apple's share of the MP3 market will reach 41 percent in 2006, and that the 1-inch HDD-based iPod Mini represented 52 percent of total iPod shipments in 2004," Castellano said. "Removing the iPod Mini from the market and substituting it with a flash-based iPod Nano effectively will eliminate 17.2 million 1-inch HDD drives from the market in 2006.
"This analysis assumes that there will be a 1:1 replacement of the Mini by the Nano, and that the lower capacity and higher cost of the flash-based Nano will not spark a mass exodus away from the iPod line," he continued. "However, Apple's decision to drop the Mini was based on its internal analysis, surveys, and focus groups, and our own surveys indicate they were correct."
But not everyone is ready to call the 1-inch HDD down for the count. Chipmaker Agere Systems, which is heavily involved in the storage market, sees a lot of potential in the consumer market for small HDDs.
