Hard disk manufacturers set an industry record in 1997 selling 130.5 million drives, according to a marketing research firm.
Strong PC shipments and increased server and workstation sales were a main factor in boosting the hard drive industry 23.2 percent over the year before, despite a glut and accompanying slowdown in sales during the second half of the year, according to Palo Alto, California, firm TrendFocus.
Disk drive industry sales,
units in millions
While average storage capacity of a hard drive grew 60 percent from 1.4 GB over 2.2 GB during the year, prices continued to drop due to bloated capacity.
"The disk drive industry grew, but at a price: Oversupply in the second half of 1997 destroyed pricing models and profit margins," said John Donovan, vice president of TrendFocus, in a statement. "This situation will only worsen in the first quarter of 1998 before rebounding in the second half of the year."
U.S. vendors maintained their lead in the market, with Seagate Technology holding the top position and Quantum and Western Digital coming in second and third, respectively. But Asian firms such as Fujitsu, Toshiba, Hitachi, and Samsung continue to invest hundreds of million of dollars to nip away at U.S. vendor market share.
The report predicts growth and profitability to slow in 1998. Additionally, it warns the sub-$1,000 PC market may cause drastic changes in supplier strategies.