Tape market poised for modest growth in 99

Posted on March 01, 1999

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Tape market poised for modest growth in `99

Heidi Biggar

Despite a flurry of midrange tape announcements and the entrance of a handful of new players in the emerging PC server arena, the worldwide tape market recorded an estimated 5% decline in total unit shipments and only a 6% gain in revenue in 1998, according to recent estimates from International Data Corp, a research firm in Framingham, MA.

The decline, says IDC analyst Bob Amatruda, is primarily attributable to continued turmoil in low-end markets (i.e., the DC2000, or Travan, space) due to increasing demand for tape alternatives such as Zip and SuperDisk. According to IDC estimates, Travan shipments declined 19% in 1998, to an estimated 1.9 million units. Revenue also fell sharply to about $265 million, 19% off 1997 figures. Nonetheless, more Travan devices were shipped in 1998 than any other tape technology, accounting for an estimated 41% of all tape drives shipped and 8% of worldwide tape revenue.

Though IDC expects Travan and especially DC6000 (Tandberg`s SLR line) markets to continue to struggle in 1999, a modest 3% up-tick in total worldwide tape shipments is forecast for 1999, from an estimated 4.7 million units in 1998 to nearly 4.9 million units. Likewise, revenue is expected to increase 4%, to $3.4 billion.

The growth, reports Amatruda, will come from the midrange segment (i.e., 4mm, 8mm, and DLT devices). The low end (i.e., Travan) is expected to stabilize somewhat as product focus changes from desktop to PC-server implementations. IDC forecasts positive growth in revenue and unit shipments for all market segments except DC6000, half-inch reel, and half-inch cartridges.

DLT leads in revenue

As the 4mm market begins to flatten, IDC expects DLT to displace it as the revenue leader ($1.08 billion versus $1.03 billion, respectively) this year. While DLT will post the largest unit shipment increase (a projected 14%), Travan and 4mm will remain shipment leaders. Together, the two are expected to account for nearly 4 million unit shipments in 1999 (1.96 million and 1.86 million, respectively), but with very modest growth (4% vs. 2%).

With Travan, 4mm, DC6000, and new offerings from such companies as Ecrix and OnStream--all going after the PC server space--something will have to give. IDC believes the startups will have a difficult time gaining a foothold in this market.

Likewise, IDC expects 4mm technologies to face increasing pressure from Travan NS on the low end and 8mm technologies such as AIT on the high end. Therefore, IDC expects fourth-generation 4mm drives to account for just 9% to 10% of total DDS shipments in 1999 (see sidebar). Says Amatruda: "DDS is up against how far it can go, while Travan NS still has some running room." DC6000 technologies will also face stiff competition from Travan NS, 4mm, 8mm, and DLT.

Other tape technologies to be factored into the 1999 forecast equation include Benchmark`s "lite" DLT drive; LTO from HP, Seagate, and IBM; and StorageTek`s 9840, to complement its 36-track drives primarily in automated environments.


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