There may be no better illustration of today’s mobile lifestyle than the proliferation of mainstream flash devices, such as media tablets and smartphones. In fact, one in three Americans over 13 years of age owns at least one of those gadgets—if not both. They are using them as consumption devices to access the digital content they want, when they want, at all hours of the day. What does this mean for the future of PCs? More specifically, what does it mean for the hard drive industry that has banked over US$300 billion in revenue since 2000, based largely on PC sales? Does this trend toward flash-based mobility mean the future of hard drives is limited?
FIGURE 1: Market for Compute Devices
The analyst community believes that media tablets and smartphones are the two biggest trends in mobility. The devices themselves are becoming smarter, more powerful, more mobile and also more affordable. However, the same analysts also believe that PCs, and hard drive storage specifically, are about to embark on the healthiest stretch of demand in history. Is it possible for both scenarios to be true? As Figure 1 illustrates, the answer is a resounding yes!
Gartner expects more than 800 million media tablets to ship over the next four years1, along with 3.5 billion smartphones2 and 2 billion PCs3. The reason this is possible is that none of the devices fundamentally replace the other, now or in the foreseeable future. According to Gartner, media tablets will cannibalize about 10% of mobile PC sales in the long term, with most of that erosion occurring in the already fading mini-notebook market.4 That sentiment is echoed by other research firms, including CEA, which found that just one out of ten media tablet owners have stopped using their netbook, laptop or desktop as a result of owning a media tablet5 (see Figure 2).
FIGURE 2: CE Life Cycle Study Results
In the end, the topic of cannibalization is a moot point to Seagate, as we view all of these devices as a net positive for hard drive storage. We understand that media tablets and smartphones need to stream data, and a significant portion of that data will be consumer-generated content, mostly video. Currently, the average iPhone user consumes 196 megabytes of data each month, and the average Android user consumes about 148 megabytes per month, with those figures expected to grow seven-fold over the next five years.6 Mobile data traffic as a whole is projected for even more explosive growth. Cisco forecasts global mobile data traffic to increase 26 times over the next few years, reaching 6.3 exabytes per month by 2015 on mobile networks.7 It’s this exponential growth in data that we are most interested in, and it is happening across a broad spectrum of devices and trends. These trends lend certainty that media tablets and smartphones will continue to fuel growth for the hard drive industry for years to come.
1 Gartner, Media Tablets by Operating System, Worldwide, 2008-2015, 3Q11 Update, September 2011 (G00219441)
2 Gartner, Forecast Analysis: Mobile Phones and Consumer Electronics, Worldwide, 3Q11, October 2011 (G00225378)
3 Gartner, Forecast: PCs, All Countries, 2008-2015, 3Q11Update, xls file, September 2011 (G00217203)
4 Gartner, Connected Mobile Consumer Electronics Forecast WW 2008-2014, pg 1, July 2011 (G00214825)
5 CEA, CE Life Cycle Study 2011, pg 29, August 2011
6 Informa Research, referenced by GigaOM – The Rise of the Gigabyte Phone, 2 November 2010
7 Cisco, Visual Networking Index: Forecast and Methodology, 2010-2015, pg 2, July 2011