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IHS Inc. : Desktops Set to Adopt 2.5-Inch Hard Drives as All-in-One PC Form Factor Gains Favor

04/13/2012 | 06:09am US/Eastern
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"The 2.5-inch hard drive market may enjoy about four to five years of uninterrupted growth before low-priced, high-density solid state drives become more competitive..."

Demand from all-in-one PCs combined with requirements for lower power consumption and a thinner, smaller storage alternative to existing 3.5-inch hard disc drives (HDD) will help create a viable market for 2.5-inch HDDs in desktops beginning next year.

Worldwide shipments of 2.5-inch HDDs to all-in-one PCs are forecast to reach approximately 1 million units in 2013, up from virtually zero this year, according to an IHS iSuppli Storage Space Market Brief from information and analytics provider IHS (NYSE: IHS). Shipments then will increase to 3 million units the following year and rise steadily until they hit some 7 million units in 2016, as shown in the figure attached. The HDD market for all-in-one PCs will continue to be dominated by 3.5-inch discs, with shipments by 2016 estimated at 31 million units, but growth will be much slower for the segment during the same period than for 2.5-inch drives.

The 2.5-inch HDD is used widely today in a variety of products, including mobile or notebook PCs, external hard disk drives and in enterprise applications such as servers and storage systems. Their advantages over conventional 3.5-inch HDDs include a smaller form factor, lower power consumption and higher endurance.

Of late, however, the 2.5-inch drives have also become attractive and desirable for desktop PCs, especially among all-in-one computers.

"With a maximum capacity of 1 terabyte, 2.5-inch HDDs are proving very attractive to PC makers for use in their next-generation all-in-one designs," said Fang Zhang, analyst for storage systems at IHS. "Multiple all-in-one PCs have the potential to adopt 2.5-inch HDDs, including the iMac from Apple Inc., TouchSmart from Hewlett-Packard, Series 7 from Samsung Electronics, IdeaCentre from Lenovo, Top Touchscreen from Asus Eee and all-in-one desktops from Vizio and Acer."

All-in-one PCs for all
With demand for all-in-one desktop PCs expected to grow, future market prospects for the 2.5-inch HDD appear encouraging, IHS believes. Compared to conventional desktop PCs, all-in-ones possess superior features and performance, brought about by advances in microprocessors and the thinner HDD size. As such, all-in-one desktop PCs can extend the markets for 2.5-inch HDDs beyond their current areas in notebooks, external hard drives and the enterprise, allowing the thinner and smaller drives to penetrate the desktop space.

Speed and pricing challenges
Two disadvantages of the 2.5-inch HDD are speed and price. Most 2.5-inch drives typically run at 5,400 revolutions per minute (rpm), compared to 7,200 rpm for the 3.5-inch. The 2.5-inch also sells at slightly higher prices than the 3.5-inch as a whole, although the gap in price can be narrowed if 2.5-inch volumes become significant.

Nonetheless, enough positive factors are present to push growth overall for 2.5-inch drives. As a result, the 2.5-inch will represent approximately 4 percent of the all-in-one desktop PC market by next year, and then go on to account for 18 percent of the all-in-one market by 2016. And as capacity and speed continue to improve and costs go down, the 2.5-inch HDD is expected to take share away from 3.5-inch HDDs in the traditional desktop PC market, IHS predicts.

"The 2.5-inch hard drive market may enjoy about four to five years of uninterrupted growth before low-priced, high-density solid state drives become more competitive," Zhang said.

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About IHS (www.ihs.com)
IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today's business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 5,500 people in more than 30 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. © 2012 IHS Inc.  All rights reserved.

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