Hitachi sees iPod hard drive market dwindling

Hitachi Global Storage Technologies plans to exit the 1-inch hard disk drive market, and also sees dwindling demand for the 1.8-inch hard drives used in devices like the iPod classic. Hitachi says that flash memory storage-based devices are filling that niche, and said that it will focus its efforts on desktop, laptop and enterprise drives instead.

In a statement provided to Macworld, Hitachi said that the 1-inch and 1.8-inch hard drive markets are "small businesses" compared to the total hard drive market.

"For example, in Q3 2007 the industry shipped 133 million units. Of those, only 33,000 were 1-inch drives and 5.9 million were 1.8-inch HDDs," read the statement. "Similarly, those form factors represented a very small percentage of Hitachi's 3Q production."

The company said it's no longer selling or marketing 1-inch drives, and any last manufacturing it is doing currently is dedicated to complete commitments to specific customers. Hitachi still offers its Travelstar C3K80, a 1.8-inch hard drive mechanism, in capacities ranging from 30GB to 80GB, "to a limited customer base."

The news was first reported over the weekend by the Japanese business newspaper the Nikkei Sangyo Shimbun (Nikkei Business Daily). The paper also reported that Fujitsu has given up on plans to enter the subnotebook hard drive market, according to Reuters.

The production of high capacity 1.8-inch hard disk drives has been absorbed by Toshiba and Samsung, which offer products up to 160GB, the same size as what's used inside Apple's larger-capacity iPod classic (the smaller iPod classic uses an 80GB drive). Apple does not identify the manufacturers of the components used in the iPod. All other iPod models use flash memory to store files instead of hard disk drives.

Overall growth in the tiny hard drive market has slowed due to changes in consumer electronics requirements, according to Hitachi.

"The market demand as a whole has not shown the originally anticipated growth, primarily because of the stagnation in requirements for high capacity in many [consumer electronics] devices and the ability of flash to fill the lower storage needs."

One-inch drives were originally envisioned as alternatives to Compact Flash media, but flash drive capacities now outstrip the capacity of one-inch drives. And the delicate design of tiny hard drives is no match for the durability of flash storage.

Hitachi Global Storage Technologies was created in 2003 when Hitachi combined its own operations with that of IBM, which exited the storage market completely in 2005. The company's products include many of the 2.5-inch hard disk drives used in Apple laptops. Hitachi said it will continue to focus on that market instead.

"For these reasons, we expect to see our 1.8-inch shipments continue to decline as we focus our resources on the larger, more stable segments-the 2.5-inch mobile, 3.5-inch desktop and 2.5-inch/3.5-inch enterprise markets," said Hitachi.

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