With the growing amount of digital data and increased need for mobility in
our daily life, the demand for portable storage devices has been continuously on
the rise. Almost all market reports in recent times suggest the upswing of the
storage peripheral devices like flash or pen drives, flash memory cards and
sticks, external hard disks, MP3/MP4 players and digital cameras that have been
augmented with the increased consumption of various digital consumer devices.
These products have created a huge market pull so much so that even the global
slowdown could not hamper its growth story. The total Indian storage peripheral
market in FY 2010 has been pegged at Rs 2,676 crore, securing a growth of 36
percent over the previous fiscal, clearly indicating the heavy commoditization
of the devices.
Its All About Flash Drives
Over the last five years flash memory has been gaining overwhelming
popularity as the new age storage medium is replacing the traditional magnetic
and optical storage devices. Portability, ease of use and mobility are the key
factors that have made these products famous among the consumers. Today a USB or
flash drive is a lifestyle device. The flash drive market is one of the fastest
growing segments in India. Reduced and more flexible duty structure introduced
by Government of India during Budget 2008 has further boosted the growth as well
as helped to stabilize the ASP (Average Selling Price) of the devices. This has
further helped to clean up the market by virtually erasing parallel import of
these products which until a year back, formed a large chunk of the market in
addition to the business generated through the authorized distributors.
The flash drive market in India witnessed a modest growth of 16 percent in
the last fiscal year and has generated a business of Rs 576 crore. FY 2010 has
proved to be a great year for Kingston, which had a healthy business growth and
dominated the market with 35 percent share. Transcend on the other hand, has
remained more or less stagnant but maintained its previous performance by
securing 32 percent share in the flash drive market. Although the end customer's
pull for Transcend in the flash market is still high, Kingston seems to have
gained control through a more organized business approach as well as regular
product availability. In terms of products, both brands gave tough competition
to each other by launching new models of USB drive with latest designs and
features to attract all customer segments. With 25 percent share, Sandisk is the
sure winner in this product category. The company maintained its trend to
introduce innovative and stylish product ranges, while embracing aggressive
marketing activities that helped it to secure an impressive growth rate.
In the present scenario, the demand for high capacity pen drives is
continuously growing. However, demand for further high capacity pen drives
declined due to increased popularity of external hard drives. Another
predominant trend witnessed in this product category is introduction of new and
innovative features like bio-metric, high speed, thinner and smaller sized pen
drives. To attract buyers, brands like Dell and Transcend came out with newer
concepts. While Dell launched pen drives with preloaded movies, Transcend
introduced models with preloaded anti-virus.
Flash Cards on the Rise
With the rise in mobile phone adoption in India, market for flash memory
cards has been witnessing exponential growth. As use of multimedia applications
are increasing, the consumption of MMC and Micro SD cards are growing. Increased
use of smartphones is another factor that is driving the growth of flash cards
in addition to growing insurgence of the cheaper Chinese handsets in India that
are being launched by local brands and are fully loaded with high end multimedia
features and applications like gaming, music, pictures.
The trend has automatically catapulted the demand for higher capacity flash
cards. One of the biggest trend for this product category is the growing demand
of lose or unbranded flash cards that are now available in the Indian market,
primarily fed from Taiwan. With the gaining traction of local and cheap mobile
handset usage, the demand for these lose cards has boosted tremendously. These
local brands provide high capacity lose cards bundled with their handsets, which
are basically use and throw products with limited shelf life. This has lead to
greater consumption of these cards by the users to replace the damaged cards.
With mobile penetration growing rapidly even in the upcountry markets in India,
market for flash memory cards has grown at a greater pace. The market size for
these devices in FY 2010 is pegged at Rs 480 crore with 33 percent growth rate.
Transcend and Kingston are the two leading vendors with an equal 25 percent
share while Sandisk once again has recorded highest growth in this category by
capturing 15 percent market share.
When Portability is the Fashion
Need for high capacity mobile storage devices has further augmented the
demand for portable or external hard drives. The prices of these devices has
also reduced drastically. These factors are supportive enough to justify the
strong growth that this product segment has witnessed in FY 2010. With a growth
rate of close to 25 percent QoQ, the external hard drive market in India has
generated a business of Rs 270 crore last fiscal securing a significant growth
of 73 percent. As the ASP of these devices has dropped down to Rs 3,200, the
external hard drives are already posing serious threats to high capacity pen
drives.
The 2.5 inches range of portable hard drives in demand and contributes 90
percent of business to the market while 3.5 inches drives cover the remaining
share. In the entry level range, the most saleable products were those belonging
to 250GB and 320GB capacities while on the higher range the most popular models
were those of 1TB in 2.5 inches and 1TB and 2TB in 3.5 inches. While Seagate
maintained its market lead last fiscal as well, Western Digital too remained
firm with its business. Jointly they held 65 percent of the total external hard
drive market in India. The other key players include Transcend, Buffalo and
Iomega. As the demand for these devices is increasing, competition between the
vendors is also steaming up. Even the PC brand, like HP, has launched its own
range of portable hard drives and others like Dell and Acer too are gearing up
to enter the market. To beat the competition, vendors are not only launching
variety of models with attractive looks but are also introducing products with
new additional features like biometric, bundled software, auto back-up, one
touch back-up, anti-shock among others.
Piyali Guha
Source: DQ