India Consumer Storage Device markets register a temporary dip owing to ‘lean season’ effect in the Jan-March 2011 quarter; show a 7.0% drop in QoQ sales (shipments)

Increase in digital content sharing and continuous decline in ASVs leads to sharp rise in proportion of flash cards, flash drives and external HDDs sold with higher memory capacities

2.5% growth quarter-on-quarter in overall capacity leads to a record nearly 314,000 terabytes of total consumer memory usage, a first for India

Mumbai : The India consumer storage device markets comprising flash cards, flash drives and external hard disk drives (HDDs) registered a ‘lean season’ dip of 7.0% in the January-March 2011 quarter in terms of overall sales (shipments). While the October-December 2010 quarter did well on account of the festive season, the traditionally lean January-March 2011 quarter showed a marginal decline. This has been revealed in CMR’s India Quarterly Consumer Storage Device Market Update, 1Q 2011, June 2011 release.

Table 1. India Consumer Storage Device Markets: Overall Sales (in millions of units) and Growth / Decline (%), 4Q 2010 vis-à-vis 1Q 2011

Source: CMR’s India Quarterly Consumer Storage Device Market Update, 1Q 2011, June 2011 release

However, what is noteworthy is that although the January-March 2011 quarter showed an expected dip in overall sales of consumer storage devices, the total memory usage bucked the trend and registered a marginal but positive growth of 2.5% over the previous quarter (1Q 2011 over 4Q 2010) to achieve a total of nearly 314,000 terabytes.

Table 2. India Consumer Storage Device Markets: Quarter-on-Quarter Growth / Decline (%) in Total Memory Usage, 1Q 2011 over 4Q 2010

Source: CMR’s India Quarterly Consumer Storage Device Market Update, 1Q 2011,June 2011 release

According to Sumanta Mukherjee, Lead Analyst, Hardware, IT Peripherals and Channels Research, CyberMedia Research Infotech Practice, “Increase in digital content creation, storage, sharing and retrieval by individual consumers, small and mid-size businesses have proven to be the key drivers for the consumer storage device markets.”

“Drop in host device prices is aiding the adoption of consumer storage devices. At the same time, drop in storage prices is leading to upgradation to higher capacity devices”, Sumanta further added.

India Flash Cards Market:
Millions of personal libraries that bridge the ‘digital divide’
The overall India flash cards market outlook continues to be positive on account of the high growth forecast for sales of mobile phones and healthy growth expected in sales of digital cameras in 2011 and beyond.

“The growth of the India flash cards market closely follows the growth of mobile handset and digital camera shipments. The increasing penetration of mobile phones and digital cameras will ensure a strong year-on-year growth for the flash cards market”, stated Nikhil Khurana, Lead Analyst, IT Peripherals, CyberMedia Research Infotech Practice.

Mobile phone being used as an entertainment device, as an amateur digital camera and as a social networking hub by more and more Indians translates into higher demand for flash cards.

In fact, today’s new generation smartphones are actually becoming increasingly powerful handheld computers and driving the adoption of micro SD cards to store and share photos, games, music and video clips etc.

Another major driver of flash card adoption in India has been the availability of low priced Chinese origin mobile handsets with high-end multimedia features for the last 3 years starting January-March 2008 quarter. Cards pre-loaded with popular music are a hit with India’s growing population of industrial, agricultural and casual workers, as well as students.

On the other hand, increased affordability and usage of digital cameras with high resolution are driving the market for high capacity / high speed flash cards, as users look for a fast and secure storage medium to store more and more still pictures and HD video.

An interesting trend in adoption of mobile USB dongles, which have a built-in slot for a flash card, provides another growth opportunity amongst the new breed of travelling business executives.

According to CMR’s India Quarterly Consumer Storage Device Market Update, 1Q 2011, June 2011 release, during the January-March 2011 quarter Sandisk emerged as the leader in the India flash cards market with 22.2% share in terms of units shipped, followed by Transcend and Moser-Baer.

India Flash Drives Market:
The convenient ‘carry-all’ for digital content
“High capacity flash drives have gained popularity as the ‘new age’ storage medium replacing traditional magnetic and optical storage disks. Flash drives have gone beyond being just data storage and transfer devices to become lifestyle products. Portability, ease of use, mobility and aesthetics are the major driving factors behind this trend”, said Nikhil Khurana, Lead Analyst, IT Peripherals, CyberMedia Research Infotech Practice.

Vendors have introduced new concepts such as pre-loaded movies and anti-virus packages to woo customers for flash drives. The demand for high capacity drives has increased continuously, with 4GB and 8GB form factors accounting for a majority of shipments during 1Q 2011.

According to CMR’s India Quarterly Consumer Storage Device Market Update, 1Q 2011, June 2011 release, during the January-March 2011 quarter Sandisk was the leader with a 32.8% share of the India flash cards market in terms of units shipped, followed by Transcend and Kingston.

India External Hard Disk Drives Market:
The preferred portable storage for personal and business content
Customers are looking for easy-to-use secure storage solutions for personal or business digital content. Not only do individual consumers look to store personal content such as music, photos, banking and financial information in a secure environment over a relatively longer period, portable external hard disk drives have also emerged as the preferred digital backup for software and accounting data for small and mid-size businesses.

“Fueled by the ongoing digital content explosion, customers look for portable hard drives that provide the optimal combination of capacity, speed and reliability. New features such as enhanced aesthetics, bundled software, auto back-up, one-touch back-up, and anti-shock among others are on offer from all major brands”, stated Nikhil Khurana, Lead Analyst, IT Peripherals, CyberMedia Research Infotech Practice.

Prices dropped between 10-12% over the last one year (1Q 2011 vis-à-vis 1Q 2010), making portable HDDs more affordable. The decreasing price difference between high capacity flash drives and entry level external HDDs may pose a challenge to the former in the near future.

New applications like a storage repository, which can be part of a home theatre system, with preloaded software, plug and play features and WiFi connectivity etc. are expected to be future demand drivers for the external HDD market in India.

According to CMR’s India Quarterly Consumer Storage Device Market Update, 1Q 2011, June 2011 release, 500 GB capacity drives are now the most popular portable HDD configuration with 67% share of units shipped during the January-March 2011 quarter. Shipments of high capacity portable HDDs of 1 TB and 2 TB are expected to grow in the coming quarters.

Figure 1. India External HDD Market: Most Shipped Configuration and Shipments Share (%), 4Q 2010 vis-à-vis 1Q 2011
 Source: CyberMedia Research, 2011

Notes to Editors:
1. CyberMedia Research tracks shipments of consumer storage devices by vendors to their distributors, stockists and / or retailers. Flash cards that are bundled as a standard offering along with mobile phones and digital cameras (as part of vendor-vendor OEM agreements) are not included in the current study.

2. CyberMedia Research does not track the number of devices brought on their person by individual passengers landing on Indian soil from overseas destinations or, those devices that are imported directly from overseas suppliers by distributors or retailers, not necessarily ‘authorised’ by the respective vendors, for open market resale. These categories of shipments are not part of the numbers reported here.

3. CyberMedia Research uses the term “shipments” to describe the number of devices leaving the vendor premises for OEM sales or stocking by distributors and retailers. For the convenience of media, the term “shipments” has been replaced by “sales”, but this reflects the market size in terms of units of devices and not their absolute monetary value. In the case of devices imported into the country it represents the number leaving the first warehouse to OEMs, distributors and retailers.

4. ASV: Average Sales Value