Flash memory demand soars

Flash is the word as gadget usage proliferates driving the need for ever-higher capacity memory cards and USB drives. By Pupul Dutta

There was a time when memory cards or pen drives were regarded as niche devices. Today, with the boom in the Indian telecom market and with a spurt in affordable digital devices like cameras and camcorders, the demand for high capacity memory cards with faster speeds has gone up.

Ditto is the case for pen drives, flash drives or HDDs. The global boom in IT, and computer technology has triggered the need for transfer and storage of vast amount of data, subsequently pushing up the demand. This explosion of data resulting from mobile devices, Internet services and applications is not only creating new opportunities for the storage industry but also driving innovation. As a result, there is a fundamental shift in supporting storage ecosystems, which increasingly consist of a complex mix of public and private Clouds, traditional big capacity SSDs and HDDs, and portable and desktop external hard drives.

Today, vendors promise storage that can outlive human years of existence, others claim better price points for a plethora of features etc.

Whatever be the case, the market would continue to be driven by demands from consumer as well as enterprise segments with the constant evolution of technologies.

Ganesh Ramamoorthy, Principal Analyst at Gartner, pointed out, “India is a much commoditized market in terms of memory devices. The market is mainly driven by smartphones that support up to 64 GB of external (micro SD) memory. Also, Indians are increasingly showing a trend of a ‘back up’ market wherein most people believe in backing up their stored data on external hard drives, paving the way for high capacity HDDs.”

The Indian consumer

India is seen as the fastest growing market for consumer electronic goods including MP3 players, mobile phones, and multimedia applications. Combined with the growing computer market in India, these factors point to an evident conclusion that India will prove to be a good destination for storage. Customers here are willing to spend more provided they get the best technology and quality to help store and protect their growing amounts of digital content.

It is no more the case of price tags ruling the purchase decisions but it is the features and capacity that prompt a consumer to make a buying choice. Moreover, with increasing demand and stiffer competition, the market is just getting better.

“One needs to understand that prices are not fully dictated by consumers. Sometimes there are situations like natural calamities; a case in point being the Thailand floods, at other times there are government policies that also decide prices of products,” said Ramamoorthy.

Manisha Sood, Country Manager Sandisk, said, “Earlier, the Indian memory market was just computing led. The trend was simple—store on a PC, hard drive or a disc. Now the usage of smartphones, especially led by affordable models, has given a fillip to the demand of these products. The evolution of the flash memory technology is a major reason for the upsurge. If we just compare the statistics one can imagine how big the market is by sheer numbers. Today about 150 million mobile phones are sold on a monthly basis and about a million camera units too.”

According to an independent study conducted in 2011, the Indian market is fast catching up with developed ones of UK, US and China and India in terms of the adoption of connected devices. Bain & Company predicted that urban penetration of such devices in India would touch 30% by 2014.

“Indian consumers are evolving and want to be in total control of the devices they use. They want their devices to be connected with each other for a complete digital environment. They just do not want to store data; they want to access it on the go. Price sensitivity is a reality but not a concern. I believe the bigger challenge in this market is to correctly anticipate the consumption pattern of storage technology in the Indian context, and to be on the pulse of the consumers’ needs and preferences. If we are able to accurately identify our consumers’ behavior and accordingly address the market, I feel we can overcome any pricing related challenges,” said Khwaja Saifuddin, Western Digital’s Sr. Director (Sales) for India, Middle East and Africa.

Ushering in 2012

India’s PC market is yet to explode with current PC penetration of only 7% approximately, where China has 65% and USA 90%. This year DRAM prices are expected to rise on account of bankruptcy filing by Japan’s Elpida Memory Inc. This, according to experts will work in favor of other DRAM vendors as reduced supplies boost average selling prices (ASPs) and revenue in the second half of 2012.

It is also expected that SSD performance will decrease over time as they increase in capacity. However, with increasing PC penetration, the market will see an upward shift.

“We foresee good PC penetration this year. So it will obviously lead to DRAM and Flash product demands in the market. Also, DRAM prices are expected to rise as supply is depleted following Elpida’s bankruptcy and as the PC market recovers from its slump following the recent hard drive shortage. The removal of Elpida’s DRAM capacity could lead to higher DRAM production among other manufacturers which means Flash should also remain stable in 2012,” said Ajay Kogta, Country Manager, Strontium Technology.

There is also a shift from flash drives to lower capacity portable HDDs. While 500 GB portable HDDs emerged as the volume drivers in 2011, sales of 1 TB units are expected to rise significantly this year once prices stabilize. Interestingly, research revealed that total capacity usage outpaced HDD sales in 2011.

On the demand side, flash memory products will grow at a faster pace. SaaS and various sub-trends in storage such as backup and archival-as-a-service and digital content repository would be the key factors for fueling overall flash memory growth in this year.

Innovations galore

Experts believe that, this year too, the price of SSDs will remain on the higher side. However, the gap is narrowing and users are beginning to accept the high price that comes along with unmatched technology. They will continue to attract consumers this year given the three main advantages that solid-state memories possess: access time, transfer rate and lower power consumption. The vendors are also making big efforts to provide longer writing cycles on flash chips.

The HDD companies too are constantly experimenting with new technologies. “In the next few months, we shall introduce the WD My Book Live Duo that builds upon the need for additional storage capacity for tablets and smartphones. The WD My Book Live Duo adds the benefits of RAID to WD’s personal Cloud storage offerings, so as to give users the advantage of a dual-drive system and safe backup through real time mirroring of data. Adding RAID will also enable us to offer wireless storage capacities up to 4-6 TB,” said Saifuddin.

WD plans to launch Thunderbolt drives in India that allows a real-life data throughput of 750 Mbps that can hugely benefit storage solutions. “For the time being, such devices are being marketed keeping media and creative professionals in mind. However, very soon we shall see Thunderbolt based devices enter the mainstream consumer market as preference for high quality content such as HD movies drives adoption,” Saifuddin added.

The company will also announce a competitively-priced volume-based offering targeted at the SMB within the next quarter. The idea, as Saifuddin said, is to drive volumes from the SMB by offering a one-stop solution that goes beyond centralized storage, and addresses the shortage of IT staff for maintenance of network setups. The new product shall ensure seamless compatibility with existing setups and easy maintenance.

SanDisk has already come out with the ‘memory vault’ product that promises to store data for about 100 years. Call it a marketing gimmick or technology, the company is certainly cashing on its latest offering, pepped up further by its ad campaign.

Further USB 3.0 is already available in the market but its integration on all PCs this year will drastically boost the market for the same.

Need for Speed

Speed is particularly important in memory products. With the increasing size of multimedia files, we need faster DRAM to open and run these files easily and higher read/write speeds of Flash products to copy and paste these files.

“Transfer rates of both mainstream DRAM and mainstream Flash will keep increasing,” said Kogta of Strontium.

There will be more innovations and newer standards will evolve with the launch of higher capacity memory devices.

“With 64 GB pen drives available, the need for speed is a necessity. The trend is led by consumers. People want portable devices that come equipped with high capacities with faster speeds, hence all SanDisk products ensure you get the best speeds, e.g. the 64 GB Cruzer pen drive comes with a speed of 30 Mbps,” said Sood of SanDisk.

Challenges

Despite the stupendous growth, this segment of business too is marred by negative elements like piracy, gray market etc. Companies are also constantly trying to create awareness about genuine products.

“Piracy and counterfeits have penetrated into each and every segment of the market. It is important for consumers to buy products from the authorized dealers only and always demand a computerized bill,” said Ramesh Rajamani, Senior Business Development Manager, Hitachi GST.

He added, “The insatiable demand for digital content and mobility is driving incredible innovation and the need for more storage. The need for storage is everywhere: consumer electronics, appliances, cloud, cars, etc. So, cashing on this increased demand, Hitachi is constantly evaluating and identifying opportunities to improve its foothold and operations in India.”

Prevalence of digital lifestyles, streaming and personal content creation for home entertainment or social networking will lead to a convergence of technologies and devices within the home. It is expected that users would want a setup wherein content is stored in a central location, from where it can be streamed to any Wi-Fi enabled device inside the home / office or accessed from anywhere on the Cloud. The memory market will continue to grow riding on the back of devices that support memory.

Moving on

With constant innovations and developments, 2012 is expected to see the market come out of the slump that it had hit in 2011. What’s more, with Ultrabooks being in vogue, the memory manufacturers can expect some excitement since these computing devices run on dual drive configurations. They are likely to use a combination of flash-based memory and traditional HDDs. SSD is likely to be the primary memory combined with a HDD serving as the cache memory.

On the other hand, flash memory is still expensive on a cost per gigabyte basis. Unlike Ultrabooks, tablets and smartphones can accommodate only so much storage capacity. Hence, personal Cloud services and devices also make a lot of sense as secondary storage for such devices.

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