Memory On The Go

The world is going mobile, and with it the memory market is taking a turn for
the better. With the growing use of mobiles for everything from making a call to
sharing information and working on the go, the need for expanded memory has
become a necessity. There are a host of other devices like MP3 players, portable
computer drives and even gaming devices, that store large amounts of data, and
the majority of these devices require extended memory products. The memory
market has a huge offering that includes hard disk drives, motherboards, graphic
cards, memory cards, memory modules and USB storage. With the demand for these
products getting higher with every launch, their capacity is also increasing.
Vendors offering their memory products in India have realized the opportunity
and are going all out to woo their customers with their pricing strategy and
introducing innovative products.

Commenting on the performance of the flash memory market Rajesh Khurana,
Country Manager-India and SAARC, Seagate said, “Over the past few years, the
flash memory card market in India has been doing very well and I guess in the
coming three to four years, there will be a revolutionary change in the market
trend. I expect that CAGR will increase by 100 percent. The most crucial factor
for such a tremendous boost is the adoption of digital devices in Indian market.
Buyers are highly conscious of the utility and features of the digital products
and their interest and urge to possess them has resulted in such a positive
trend.” With all these changes in the end-user requirements the memory market is
on the boom.

Key players

While hard disks were originally developed for computers, the applications for
hard disks gradually expanded beyond computers to include digital video
recorders, digital audio players, personal digital assistants, and digital
cameras also. In 2005 the first mobile phones to include hard disks were
introduced by Samsung and Nokia. A major player in the hard disk drive segment
is Seagate. Seagate products encompass hard disk drives for the widest range of
applications-high-end enterprise use, standard desktop PCs, consumer electronics
and personal entertainment, mobile devices, surveillance and security uses,
automotive uses, etc. “A recent survey of hard disk market conducted by AC
Nielsen Market Research indicated that Seagate holds nearly 74 percent
marketshare in India. Moreover, Seagate has won over 50 product awards and
accolades in India in 2006. Evidently Indian market acknowledges that Seagate
products lead in terms of technology, features, service and marketing offers,”
claimed Khurana.

Making inroads in the storage market with its innovative products, the
company shipped 124 million HDD applications in 2006 and is projected to ship
255 million in 2009. Speaking about technology trends in the market Khurana
said, “Seagate doesn't just keep up with technological changes, it actually
leads the change. With a long tradition of innovation and market-leading new
product introductions, Seagate has been the prime mover behind many
first-in-category introductions.” Citing examples, Khurana pointed out that
Seagate was the first to develop and introduce hard disk drives based on
'perpendicular recording' technology. This enabled a quantum jump in areal
recording density; making very high capacity drives possible within the standard
form-factors. In fact, in September 2006, Seagate demonstrated a 42Gpsi areal
density. He added that within the first half of 2007, Seagate's entire range
would be based on perpendicular recording. The company has also introduced the
15,000RPM (very high speed) drive for on-demand enterprise uses (in its Cheetah
range).

According to a Dataquest survey, the market for flash drives has grown from
one-lakh units in 2004-05 to over nine lakh in 2005-06. The survey further
stated that the Indian market for flash drives has seen stupendous growth and
has grown from 1,00,000 units in 2004-05 to over 9,00,000 units in 2005-06. The
shift from FDD to pen drives, which started in the last one to two years, gained
considerable momentum in 2005-06 riding on the demand generated by the working
professionals in corporate and SOHO segments. The youth market further
strengthened in 2005-06, which contributed to this growth.

One of the latest entrants in the flash drive market is Moser Baer who
introduced a range of USB flash drives in the Indian market towards the end of
last year. With capacities ranging from 512MB to 4GB, the Moser Baer range will
have one million rewritable cycles and its advanced technology circuitry has
data retention feature of up to 10 years. The high-end range with a capacity of
4GB is capable of holding over 1,000 (conditions apply) MP3 songs or high
definition images and hours of MPEG4 video footage. “The domestic USB market is
growing at a very fast pace. Having entered the market recently we currently
hold a small market share but over a period of time we hope to hold 10 to 15
percent and then gradually 50 percent of the total marketshare in India. In
terms of price as well as the market has segmented the market size has evolved
as what was earlier a 1GB unit now 2GB,” said Mahesh Rangra, Senior Manager,
Moser Baer.

Vying for the top slot

The memory card market is another huge market with many vendors vying for the
number one position. There are several memory card formats available, including
CompactFlash, Secure Digital, Memory Stick, SmartMedia, MultiMedia Card and xD
Picture Card among others. The use of these changes with the requirement as well
as with changes in the market trends. Some memory card manufacturers, including
SanDisk, Lexar and SimpleTech, are releasing new models with higher speeds.
Speaking about the memory card market in India Manisha Sood, Country Manager,
SanDisk Corporation said, “Currently, the demand of storage devices is in growth
phase. As far as the entire sub­continent is concerned there is already a
high-level of awareness and the market has matured. There is a gradual trend of
decline in demand due to saturation worldwide. After China, India is the hottest
market for memory cards. SanDisk is highly optimistic about business prospects
in the Indian market as there is a substantial increase in the sale of digital
cameras, mobile phones, video games and laptops.”

Among the memory modules manufacturers A-DATA is the world's second largest
vendor (DRAMeXchange, July 2006).

The company was awarded the iF Product Design Award during CES 2007 for its
product-Mini Cube 1-inch USB HDD. The USB is less than 5cm in length, 1.2cm in
height and has a storage capacity of 12GB. In the flash drives market Kingston
is a well-known name. While it is just picking up in the USB card market, the
company claims to hold the number two position with the highest growth rate of
60 to 70 percent YoY. “There is much growth opportunity in India and we are
gaining popularity as a brand in India. Our focus will be on volume,” shared
Rajesh Panicker, Country Manager, Kingston. He pointed out that the three areas
the company was focusing on are quality, pricing and helping partners with
inventory manage­ment. Panicker fore­casted that by the end of the year the
company would sell 1.5 million USB drives and two million flash cards.

Looking ahead

Speaking about his vision for the hard disk memory market Khurana said, “We are
seeing an increasingly 'on-demand world'. Digital content creation and
distribution are driving explosive growth in storage-be it music, photo and
video, large enterprise data, the vast amounts of information being exchanged
over the Internet etc. What will drive the market in coming years will be demand
from emerging consumer storage needs.”

He added that with the increasing demand for digital cameras and mobile
phones that can attach more than two memory cards with it, the installation rate
was also increasing. “Following the trend, the attachment rate of memory cards
is expected to rise up to 50 percent and 70 percent in mobile phones and digital
cameras respectively,” he said.

Speaking about his vision for the memory market Panicker opined, “We are
currently at the number two position and my vision is to be the number one
player in USB and flash market by the end of 2007 for which we have invested
correctly and wisely in partners.” Currently 60 percent of Kingston's business
comes from the channel and the company is very aggressive with regard to pricing
of its products. A lot of focus will also be on offering schemes and holding fun
events for partners. While exclusive Kingston retails stores are not on the
cards for the company, Panicker stressed that the company was aiming at making
the cards available in all mobile stores with a separate counter dedicated to
the brand.

Speaking on the same lines, Rangra added, “For Moser Baer, availability is
the key. We will work at making products available at arms length.”

Ruth Samson