Hard disk shipments reach new record level

El Segundo (CA) - Hard disk manufacturers ended 2005 on a high note, setting a new record for quarterly shipments. According to market research firm iSuppli, the industry shipped 103.4 million units in the fourth quarter of last year, up 8.3 percent from 95.4 million in the third quarter, and up 20.9 percent from 85.5 million in Q4 of 2004.

"Hard drive shipments in the fourth quarter and in the second half of 2005 were boosted by strong demand from the consumer electronics market," said Krishna Chander, senior analyst at iSuppli. "Products including MP3 players, Personal Media Players (PMPs) and Digital Video Recorders (DVRs) are helping drive the growth of the hard drive market. Meanwhile, robust sales of notebook computers have led to healthy sales increases in the hard drive industry’s core market in PCs."

According to the market research firm, the industry was able to pots a record quarter despite a rocky year that brought new challenges for hard drive manufacturers. Most importantly, Apple computer decided to ditch the hard drive in its mainstream audio player, the iPod Mini and replace it with Flash memory in the mini’s successor iPod Nano. However, iSuppli indicated, the video-enabled iPod accelerated sales of 1.8" hard drives.

Despite much speculation that Flash memory could threaten the existence of 1" harddrives, hard drive suppliers posted one of their best years ever with "practically every" hard drive maker being in the black in Q4, iSuppli said. Seagate and Western Digital reported record revenues and healthy net incomes. Hitachi GST reported a profitable quarter after a string of net losses. Both Fujitsu’s and Toshiba’s parent companies stated that their hard disk divisions generated healthy returns, according to the market research firm.

Maxtor was the only large hard drive maker to report a net loss ; however, iSuppli said that the company narrowed its deficit. Seagate is expected to complete its acquisition of Maxtor in the second half of this year.