Hard drive market saw 'bittersweet' first quarter

According to a new report by iSuppli, times are getting somewhat tough for hard drive makers. Shipments increased overall between the first quarter of 2006 and the first quarter of this year, but they declined further than expected—4.7%—compared to the fourth quarter of 2006. iSuppli says it estimated that 118 million units would be shipped in Q1, but only 114 million ended up shipping.

To make matters worse, iSuppli says, hard drive makers' profits are declining because of thinning margins brought on by "intense" competition. Seagate's margin went down from 24.3% to 21.3% between Q1 2006 and Q1 2007, and Western Digital saw a similar year-over-year margin decline from 19.3% to 15.7%. Competition in the mobile PC and consumer electronics storage markets is named as the culprit for those drops.

As far as market shares go, though, not much seems to have changed. Seagate was still the leading hard drive maker in Q1 with 34.6% of the market—the same figure as in Q1 2006. Western Digital also remained in second place and saw its market share rise from 20.5% to 21.% year-over-year, while Hitachi GST retained its 17.2% market share. Samsung's slice of the pie went up slightly from 10.4% to 11%.

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