PLANNING AND LEADERSHIP FOR A BETTER WORLD
PLANNING AND LEADERSHIP FOR A BETTER WORLD Disruptions in the IT supply chain may result from the legions of iPad look-a-likes. Touch-screen tablets may mark the beginning of the end for the hard disk drive (HDD) industry as well as wreak havoc among display suppliers by simultaneously causing both shortages (of the most popular displays) and overstocks (of displays in tablets that prove unpopular).
According to a report titled "The Hard Disk Drive Industry: Market Analysis and Processing Trends" recently published by The Information Network (New Tripoli, Pa.), touch-screen tablets are already cannibalizing netbook sales as well as slowing the uptake of new laptops and desktop PCs. As a result, netbook and PC makers are scrambling to bring out touch-screen tablet models to meet the demand for this new form factor. However, the real casualty in coming years may the HDD industry, since touch-screen tablets are accelerating the move from HDDs to flash semiconductor memory—so-called solid-state drives (SSDs).
As sales of touch-screen tablets skyrocket, Apple's market share will slowly erode, but not fast enough to prevent havoc in the IT supply chain.
According to the report, the HDD market is already reeling from a drop in demand as touch-screen tablets containing SSDs rose on sales of 17 million units in 2010. The market is predicted to grow to more than 54 million in 2011. Overall in 2010, PC sales were significantly up, so HDD sales were still robust, but if touch-screen tablets begin to dominate the computer market as expected, then HDDs are expected to steadily decline.
"HDD sales were impacted by tablet sales in Q4 to the tune of 17 million units lost to tablet-based SDDs," said principal analyst at The Information Network, Robert Castellano. "In 2011, we expect more robust sales of media tablets—54 million units. These sales will impact the PC industry, particularly netbooks and notebooks, which in turn will impact HDD sales as they will lose out to SDDs for the 54 million units. This equates to lost sales of 7 percent of the total HDD market in 2011."
Touch-screen tablets are also expected to upset the supply chain for flat-panel displays in 2011, according to IHS' iSuppli (El Segundo, Calif.), which predicts disruptions in the global display industry that create both shortages and excess inventories, as display makers have to guess which models will fail and which will succeed.
"As iPad competitors turn their focus to tablets, the demand for netbook and notebook displays will soften," said Joe Abelson, vice president of displays at IHS. "Display suppliers will be forced to gamble production capacity on the unrealistically high projections of their tablet customers. With different panel sizes and specs in play, the industry should expect to see significant inventory shortages and excesses throughout 2011."
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