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Storage Demand, Revenue On The Rise

Spiking sales of PCs, external drives, and optical drives signal increasing revenue for the storage sector.
Global revenue from hard disk drives and optical disk drives is expected to increase this year, driven mostly by rising shipments of PCs in the improving economy, a market research firm says.

Worldwide revenue from shipments of HDDs is expected to reach $27.7 billion this year, up 18.4% from $23.4 billion last year, iSuppli said in releasing preliminary figures Thursday. Revenue from computer-oriented optical drives is expected to increase to $14.8 billion, up 7.6% from $13.7 billion in 2009.

The revenue increase would follow a year-to-year decline in 2009, caused by the economic recession. HDD revenue last year declined by 11.7%, while that of ODD decreased by 6.3%.

"The 2010 economic recovery will bring rising sales of PCs," iSuppli analyst Fang Zhang said in a statement. "The notebook sector is expected to be particularly strong, with shipments outgrowing those of desktops. This will drive the robust increase in HDD shipments."

Indeed, analysts in general expect PC sales to increase this year, following a difficult 2009 for manufacturers. Major tech vendors, such as computer maker Hewlett-Packard and chip maker Intel, have been cautiously optimistic that consumers will continue buying and businesses will return to the market this year to buy replacement PCs.

Other factors contributing to the expected increase include new server purchases by business and the migration to 2.5-inch HDDs in data centers to reduce costs, iSuppli said. Also, adoption of Microsoft's Windows 7 in enterprises is expected to boost PC sales.

Beyond PC sales, increasing sales of external drives on which to store games, music, and movies are also expected to boost HDD revenue this year. Optical disk drive revenue, on the other hand, is expected to increase this year as demand for gaming, movies, and high-quality sound systems rise.

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