Intel issued a press release today cutting their quarterly guidance by $1 billion ($14.7b to $13.7b) due to the impact of the hard drive shortage. While we’ve been expecting the hard drive supply problems to impact the purchase of computers at large, it appears Intel is finding the greatest impact at the lower end of the market where price sensitivity is a greater issue. Best Buy and other retailers love to run notebook specials for instance at sub-$700 prices. These deals are great for consumers on a budget, but also reflect the reality that the same machine with a hard drive that might cost twice as much now, or an SSD that’s hundreds of dollars more, just aren’t being made in the same quantities or capacities required by buyers.
Intel issued a press release today cutting their quarterly guidance by $1 billion ($14.7b to $13.7b) due to the impact of the hard drive shortage. While we’ve been expecting the hard drive supply problems to impact the purchase of computers at large, it appears Intel is finding the greatest impact at the lower end of the market where price sensitivity is a greater issue. Best Buy and other retailers love to run notebook specials for instance at sub-$700 prices. These deals are great for consumers on a budget, but also reflect the reality that the same machine with a hard drive that might cost twice as much now, or an SSD that’s hundreds of dollars more, just aren’t being made in the same quantities or capacities required by buyers.
Intel went on to confirm that they feel hard drive supply will catch up to demand in the first half of 2012. In terms of SSDs filling the void left by hard drives, Intel is seeing minimal impact in the consumer PC space. No matter which way you slice it, a 60 or 120GB SSD will never replace the 500GB or 1TB hard drive many buyers want in a desktop or mobile platform. It is a very vendor-specific issue though, and Intel does expect SSDs to gain more traction in 2012 as vendors gain better visibility into the next several quarters and what their access to hard drives will be. Some systems such as Ultrabooks or thin notebooks like the Apple MacBook Air come standard with SSDs and push performance over storage capacity, which certain buyers are willing to accept. With bread and butter systems though, many still turn to large amounts of storage as a primary need.
Intel’s commentary is inline with what we’ve been reporting during this shortage. Those who have been on the fence about going with a solid state drive now see a better cost proposition with the temporary inflation of hard drive prices. This is especially true in the enterprise as more lower-cost MLC NAND solutions come to market. On the consumer side, SSDs still can’t fill the gap in terms of GB/$ that consumers have come to expect from hard drives. Rich media such as HD digital video and high-resolution photos still need a dense storage device, which hard drives provide at a traditionally affordable price.
2012 will see continued growth in the SSD space from both the client and enterprise, but how much results from natural market expansion vs. the hard drive shortage remains to be seen.
