Articles
07 March 2006, SmallTimes
BIG BYTES IN SMALL PACKAGES
Before the iPod, there was Toshiba's tiny 1.8-inch hard drive, which has been inside the music player since the beginning.
Twenty-five million of these drives later, Toshiba is the clear leader in the space and continues to push storage innovation byte by byte. It began shipping an 80-gigabyte (GB) version in January.
"Everybody wants smaller (drives that use) less power and have cooler operation and the 1.8-inch is well suited to it," said Scott Maccabe, vice president of Toshiba's Storage Device Division. "It just happened to be a great fit for a fruit company in the Bay area." Toshiba wasn't part of Apple's product announcement Tuesday. Then again, Toshiba, which has its U.S. storage division in Irvine, never uses the "A" word because of nondisclosure agreements.
In this growing world of hard drives for consumer electronics gadgets, Toshiba has more important things to think about, like improving technology to stay ahead of competition.
"It's the consumer saying, 'I want it all.' That's why folks like Apple can kill Dell's entry into the MP3 space. They're also listening to the voice of the consumer," Maccabe said. "It's exciting for us because in the past, you had leaders like Dell leading because of operational efficiency. That concept is now a requirement for a ticket to the game. But to lead the game, you've got to really have the depth and capabilities to invest in technology." Toshiba spent $3.3billion on research and development in 2004, the most current year available. And the company continues to increase the investment. That helped Toshiba last year become the second largest seller of 2.5-inch drives, used in laptops, according to market researcher International Data Corp.
Its drives made up 22.5 percent of the market. Toshiba dominated the 1.8-inch market -- the iPod market -- with 85.1 percent. And it's pretty much the only company selling an .85-inch drive that is about the size of a quarter.
"Toshiba's success is due to a lot of reasons -- good products, wise investment and good timing. They had a great run of the notebook market.
The fact is they were the innovators in the iPod market. Now they're trying to do the same thing with the .85-inch, a much harder sell," said John Donovan of TrendFocus, who tracks the storage space.
The sub 1-inch space competes with a very different technology: flash memory, used in digital cameras and music players because it has no moving parts and can take a beating. But flash cards are reaching 8 GB, while Toshiba's tiny drive is at 4 GB. The company, however, recently announced that by using the new perpendicular magnetic recording technology, it would squeeze 10 GB per on the drive by next year.
"Realistically, look at the applications. The iPod nano, which is the big thing for flash, is at 4 GB and that's the biggest Toshiba can do today.
Apple and those guys will choose flash all the time because of durability," Donovan said. "You've got to wonder why are they doing this? Is it because they've already sunk the money into it and want to keep going? Or do they know something that flash is incapable of doing that these hard drives will do." Newcomers are encroaching on its turf, including Lake Forest's Western Digital, which started selling its first laptop drives in late 2004 and now has 17.2 percent of the market, says IDC. Others have been eyeing Toshiba's iPod success and are looking at building the 1.8-inch drives.
"It will be challenging for Toshiba to maintain its market share with new entrants, but overall unit growth for these two categories of (hard drives) over the next few years will provide Toshiba with an opportunity to grow its volumes even as competitors enter its space," said John Rydning, IDC's research manager for the hard-disk drive space.
That's why, said Maccabe, Toshiba focuses on innovation.
"It may be on the radar for our friends at Western Digital, but it's not easy. We're already on our fifth-generation product," Maccabe said. "As they say, the best way to predict the future is to create it and that has been our belief."
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Last changed: 07 March 2006
