Hitachi Targets Major Increase in CE Hard Drive Shipments
Hitachi Global Storage Technologies is committing a sweeping resource mobilization to more than double its consumer electronics (CE) hard drive shipments in 2005. The company’s strategy centers on three hot‑ticket segments – MP3 and personal media players (PMP), digital video recorders (DVR), and mobile phones – each of which demands a distinct blend of size, capacity, and reliability. By tailoring product development, customer support, and marketing to these markets, Hitachi aims to translate its proven 1‑inch microdrive dominance into new revenue streams across the CE landscape.
Central to the plan is the aggressive ramp‑up of the 1‑inch Microdrive line. In 2005, production of this form factor will more than double, with the newly announced “Mikey” version – an even smaller variant – ready to spur uptake in mobile phones that increasingly rely on flash storage alternatives. Mikey’s compact footprint and low power draw make it an ideal fit for the growing class of feature phones that began to incorporate music playback and simple video functions around that time. Hitachi’s experience with the original Microdrive, which already holds a strong market share in PMP devices, provides a blueprint for capturing this emerging phone segment.
Parallel to the Microdrive push, the 1.8‑inch Travelstar family is slated for a triple increase in output. The Travelstar line, long favored by the jukebox and PMP markets, will now benefit from a new “Slim” model that cuts down on size while maintaining the same 1‑inch drive capacity. This development has sparked significant interest from OEMs, who see the slim form factor as a way to embed higher storage capacities in increasingly thin devices. Demand for Slim is expected to rival that of the 1‑inch Microdrive, potentially driving a notable shift in the overall CE hard drive ecosystem.
The company is also planning a substantial surge in 3.5‑inch Deskstar production – up by more than 50 percent. Deskstar, a workhorse for desktop computing, is being re‑engineered to meet the demands of the DVR market. With enhanced video‑streaming capabilities and a 500‑gigabyte configuration, Deskstar will serve as a powerful storage platform for DVRs that require high throughput and large capacity for continuous recording and playback. This expansion signals Hitachi’s intent to cross the traditional boundary between consumer and professional storage products, leveraging its high‑performance core to win new CE contracts.
Industry analysts predict that CE devices will absorb 20‑22 percent of all hard drives shipped in 2005, up from 15 percent the previous year. Hitachi’s projected doubling of CE shipments places the company well above the industry average, positioning it to dominate the CE segment during a period of rapid growth. IDC research confirms Hitachi’s lead: the firm held 24.7 percent of the CE market in the final quarter of 2004 and 19.8 percent for the year as a whole. These numbers underscore the company’s strong footing and its capacity to scale quickly in response to rising demand.
Senior Vice President Bill Healy notes that the company’s focus on CE hard drives is grounded in IDC’s recent findings. “Hitachi’s strength in CE hard drives is now validated with IDC’s recent findings and provides a strong basis from which to accelerate our CE business in 2005,” he says. Healy emphasizes Hitachi’s commitment to developing smaller, high‑capacity drives that are more rugged, consume less power, and come at lower costs – attributes that align with the stringent requirements of mobile phones, PMP devices, and DVRs.
John Buttress, IDC research manager, adds that Hitachi’s aggressive 2005 plans demonstrate a serious commitment to maintaining leadership in this high‑growth segment. “In 2004, Hitachi established a credible leadership position on the CE hard drive landscape,” Buttress says. “Hitachi’s aggressive plans for 2005 indicate a serious and strong commitment to maintaining a leadership position in this very competitive and high‑growth segment.”
In sum, Hitachi’s 2005 strategy hinges on expanding production across multiple form factors, deepening its focus on the three most promising CE segments, and leveraging proven success in the 1‑inch market to drive growth elsewhere. The company’s ambition to more than double its CE shipments reflects confidence in both its product roadmap and its ability to scale operations to meet the surging demand from OEMs seeking reliable, high‑performance storage for the next wave of consumer electronics.
Strengthening Market Presence and Support for Consumer Electronics
Beyond product expansion, Hitachi is rolling out a comprehensive support and distribution plan designed to accelerate its penetration into the consumer electronics arena. The company will broaden the array of retail products available and extend its presence across traditional brick‑and‑mortar stores as well as online marketplaces by the second quarter of the year. This dual‑channel strategy is aimed at making Hitachi hard drives more accessible to OEMs, distributors, and end‑users who are increasingly shopping online for parts and accessories.
Key to this approach is the launch of five Hitachi Design Studios worldwide. Opened in 2005, these studios are located in Fujisawa, Japan; Havant, United Kingdom; Rochester, Minnesota; Shenzhen, China; and Taipei, Taiwan. Each center will specialize in working closely with device manufacturers to integrate Hitachi hard drives into their CE products. By embedding design expertise directly within the OEM ecosystem, Hitachi can reduce integration time, lower the risk of incompatibility, and ensure that storage solutions meet the unique power, heat, and space constraints of modern electronics.
These design studios also serve as a platform for co‑development projects, allowing Hitachi to prototype custom drive solutions that fit specific device form factors or performance requirements. The studios will host engineers from Hitachi’s storage technology division, providing OEMs with access to the latest firmware optimizations, thermal management techniques, and endurance improvements. This collaboration model not only speeds time‑to‑market for new CE devices but also fosters long‑term partnerships that can translate into recurring revenue streams.
Hitachi’s broader retail strategy includes expanding its catalog of accessories – such as protective casings, mounting brackets, and power adapters – to complement its hard drive lineup. By offering a one‑stop shop for OEMs, Hitachi can streamline the procurement process and reduce the logistical overhead that often deters smaller manufacturers from adopting new storage technologies.
Marketing efforts will emphasize Hitachi’s proven track record of reliability and performance in demanding environments. Campaigns will highlight success stories from early adopters of the 1‑inch Microdrive and 1.8‑inch Travelstar, as well as testimonials from DVR vendors who have benefited from the enhanced Deskstar line. By positioning its products as the default choice for consumers seeking durability and longevity, Hitachi seeks to differentiate itself from competitors that rely heavily on flash memory, which, while fast, often falls short in terms of endurance for continuous recording workloads.
In addition to these initiatives, Hitachi will increase its presence at industry trade shows and developer conferences. Showcasing new drive models, such as Mikey and Slim, in real‑time demonstrations will help OEMs visualize how these components fit into their designs. The company will also sponsor workshops that guide hardware designers through the intricacies of integrating hard drives into mobile phones and DVRs, covering topics like power budgeting, heat dissipation, and firmware configuration.
Finally, Hitachi plans to enhance its after‑sales support infrastructure. By deploying a global network of service technicians and offering extended warranties on its CE hard drives, the company will provide peace of mind to OEMs concerned about component failure. This commitment to reliability aligns with Hitachi’s broader strategy of building trust in markets that increasingly prioritize long‑term device uptime.
Through this multi‑pronged approach – combining aggressive production scaling, localized design studios, expanded retail channels, and targeted marketing – Hitachi is positioning itself to capture a larger share of the consumer electronics hard drive market. The company’s comprehensive support framework, coupled with its robust product pipeline, sets the stage for sustained growth and continued leadership in the evolving landscape of embedded storage solutions.
