The WAVE Report
Issue #0802------------------2/22/08

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0802  Storage Visions 2008

0802.1  Tom Coughlin – The Human Side of Storage Demand

0802.2  Ross Rubin – Fast Forward to Flash

0802.3  Jim Handy – Storage: What’s Next? Who’s Buying?

0802.4  Stephen Baker – Retail Storage Devices – Trends and Outlook

0802.5  Digital Picture Frames - 2007

0802.6  NAND Enables UGC in Social Networking

0802.6.1  Market Overview

0802.6.2  Samsung – NAND Flash Memory Market Disruption

0802.7  WAVE Comments

0802  Storage Visions 2008
By John Latta

Las Vegas, NV
January 5-6, 2008

This is the only conference which focuses on storage technology in consumer markets. There are approximately 500 attendees in this event which happens just before CES. One of the strengths here is that there is the expectation that the speakers bring formal presentations. As a result there is a structure and some thought applied to the topics.


0802.1  Tom Coughlin – The Human Side of Storage Demand

Tom Coughlin is the individual responsible for the Storage Visions conference and an analyst in consumer use of storage. He is completing a report with Jim Handy, “Digital Storage in Consumer Electronics,” due March 2008.

The home will be a major consumer of storage and video is at the center. By 2013 it is estimated that:

     HD Television will be the major driver with the average household needing 3.728TB,

     HD Video Download will only require .33TB and

     Music 2.7GB

The accumulated digital content also in 2013 will have the following distribution:

     Personal data – 214GB
     Retail Home Video – 1502GB
     Gaming – 384GB
     Home Backup – 1920GB
     Home Entertainment – 4835GB

Storage in the home will be distributed in many applications. These include, also in 2013, the following HDD, based in the units sold:

     Set Top Boxes – 120m
     External Storage – 30m
     Auto Entertainment – 25m
     Personal Media Player – 50m
     Auto Navigation
     Handheld GPS
     MP3 Music Player
     Cell Phone
     Digital Still Camera

Flash applications have a different mix in 2013 which includes:

     Cell phone – 1.8B
     Digital Still Camera – 100m
     Personal Media Player – 100m
     Handheld GPS – 10m

Optical Disk Drives will peak in 2009 at 300m units and fall to 240m units in 2013.

HDD areal density is expected to continue to grow to the point where in 2010 there will be:

     300+ GB 1.8” HDD
     500+ GB 2.5” HDD
     1+ TB 3.5” HDD

It is expected that the total shipped capacity for consumers by 2013 will be 650 Exabytes.

Content sharing and user generated content will cause a significant storage growth by 2015 and it could be several zetabytes of consumer content.


0802.2  Ross Rubin – Fast Forward to Flash

Ross Rubin, Director of Industry Analysis, Consumer Technology, NPD Group, discussed some of the latest consumer purchasing trends.

     The opportunities for HDD are expanding due to the HD migration

     Vudu is delivering VoD over broadband.

     SanDisk has begun an assault in the home with TakeTV

     Memory card slots are appear in many products, even alarm clocks

     MicroSD is gaining traction in the cell phone markets

     Both digital still camera and digital audio players are starting to slow growth

     Both flash card enabled navigation devices and digital picture frame are two of the fastest growing

     HDD have declined to 20% of the portable media players.

     Nearly 60% of the mobile navigation units have integrated flash

     Over 18% of the camcorders now have HDD.

     The number of cell phones with removable flash drive slots is over 30%.


0802.3  Jim Handy – Storage: What’s Next? Who’s Buying?

Jim Handy brought his perspective of the consumer storage market, based in part on his participation in the report, “Digital Storage in Consumer Electronics.”

     The use of storage drives is paced by the content and the capacity/performance of the drive. These are
     described in terms of eras.

          1980 – Text files
          1990 – Photos
          2000 – Music
          2010 – Video
          2020 – Library Replica
          2030 – Internet Replica
          2040 - ??

     The use of both Library and Internet Replica is to show how storage technology is sufficient to hold
     significant parts of each based on the interest of an individual.

     At least to 2040, Jim does not see any cross over point for semiconductor and HDD pricing/GB.

     Every decade the cost of each of these technologies has declined by this fraction:

          Semiconductor – 1/165 of the price 10 years earlier

          HDD – 1/114 of the price 10 years earlier

     These decline patterns allow for an interesting assessment.

          By 2010 all the works of Shakespeare

               Semiconductor storage = Cost 3¢
               HDD = 2/100¢

          By 2020 all the music of Mozart

               Semiconductor storage = Cost 80¢
               HDD = 1¢

          By 2030 the complete Library of Congress, today it is 1TB

               Semiconductor storage = $2.25
               HDD = 4¢


0802.4  Stephen Baker – Retail Storage Devices – Trends and Outlook

Stephen Baker, VP Industry Analysis, NPD Group provided some insights on the retail sales of storage.

     Consumers to not purchase disk drives by size as the size of today’s drives exceed their requirements. The
     main factor in disk purchases is price and this has remained stable at $120. Thus, the significantly
     increase the capacity disk drives is of limited or no value without more functionality. The trend to
     external drives is an example of this.

     On Black Friday the average HDD size has grown from 160GB in 2004 to 348GB in 2007. But the unit growth
     rate has declined to 40%.

     Storage cost has begun to level off at 30¢/GB.

     Notebook disk drives now represent over 40% of the consumer disk drive purchases.

     For storing images, HDD, are still the medium of choice, even well above CD writing.

0802.5  Digital Picture Frames - 2007

Ross Rubin, HPD Group, stated that Digital Picture Frames emerged as a significant market in 2007. Here are additional points he made when the WAVE spoke with him.

     Prices showed continued erosion with frames going as low as the <$50 level.

     Creative bundles were offered with frames included with cameras, for example.

     The 7” frame is the sweet spot of the market but the trend is to larger panels.

     Already in 2007 the market was driven to commodity levels where there was significant volume in the low
     priced products.

     The buyers were dominated by women.

     A number of no-brand-name suppliers made inroads into the market.

     Already WiFi, on the frame, is becoming a must have feature. The expectation is that the frame content can
     be driven from the PC and the content from one’s photo
     library can be shown on the frame over a wireless connection.

     The Cevia subscription based model is in disfavor.


0802.6  NAND Enables UGC in Social Networking

One of the more unique connections was the following. NAND flash technology allows low cost purpose driven industrial designs and this has enabled the Flip Video Camera. This is the hottest selling video camera on Amazon – $129/$149, with 1GB and 2GB of storage. The camera sales are driven by its ability to create low-cost UGC for social networking sites.


0802.6.1  Market Overview

There were a number of presentations on the market. Here is a summary of the key statistics in memory, media and social networking.

     In 2007 there was 1.9 Trillion MB of NAND Flash sold and this is estimated to grow to 33.5 Trillion MB by

     There were 220B digital still camera photos and 100B cell phone photos in 2007.

     1 hours of HD video requires 8 – 10GB

     There were 30m units of Personal Storage products in 2007 with 70% in 3.5” form factor. By 2009 this market
     is estimated to grow to nearly $4B. The attach rate is 18% of PC in 2007 with growth to 25% by 2011.

     Online storage services are seen by consumers as positive by only 52%, on a worldwide basis. The
     largest concern is privacy at 42% with cost by 29%.

     With the over-the-air transition to digital television in February 2009, a small television station will need
     at least 40TB of archive storage.

     The average consumer of digital photos has 900+ images while a media enthusiast will have 10,000+ media
     files. The average household is create 700GB of data per year and this will grow to 4TB by 2010.

     1 in 4 of all Americans has a MySpace page. 75% MySpace users have an account on another social
     network. 59% of all teenagers have created and shared content online. 77% of social networking teenagers
     create and share content frequently. From a Facebook poll, 46% of the users store content on 3 or more
     locations or devices, while only 1% do this same on only 1 location.

     In 2006, there were 100,000+ regular pod and videocasts. At this same time, there are 100m social
     media accounts. The number of video streams was 7.2B, but in 2007 this grew to 60 – 70B streams. For
     example, in September 2007 nearly 70m persons watched 2.5B videos on YouTube.

     It is estimated that in 2012 the 25% of consumer entertainment will be created and consumer within Peer


0802.6.2  Samsung – NAND Flash Memory Market Disruption

Jim Elliott, Director of Flash Marketing, Samsung Semiconductor, gave an interesting overview of the role that NAND can play in the market.

     The total memory market was $60B in 2007, where $21B was the NAND and the rest in DRAM. The growth of bits
     of NAND is expected to decline from 250% in 2005 to a more modest 90% in 2010.

     Approximately $26B was spent in CAPEX by Flash suppliers in 2007.

     Flash market segments are as follows:

          UFD - $1.5B - 2007
          Audio - $3B - 2007
          Camcorder - $500m - 2010
          Primary Storage - $6B - 2010

     The CAGR from 2007 to 2011 is estimated by the following NAND segments:

          Navigation devices – 108%
          Mobile – 113%
          SSD – 220%

     The NAND value proposition is shifting from DSC to mobile and to SSD. This latter is expected to be the
     major industry driver beginning in 2008.

     In the navigation market it takes 2GB just to store the 2D map data for the US and in Japan they are
     beginning to store 3D map data.

     There were >600M NAND cards sold in 2007 and these are used mostly in DSC, mobile, MP3 and video. The
     adoption of the Micro form factor is seen as a major driver, going forward, for the growth of removable
     memory in cell phones.

     The cost dynamics of NAND is driven by the ability to place more than on bit in a NAND cell. Endurance is an

          SLC – 100k endurance – PC and Enterprise storage
          2bit MLC – 10k endurance – consumer products
          3bit MLC – 1k endurance – preloaded cards including content distribution

     In 2008 2bit MLC is expected to reach 90% of the market. During this year 3Bit MLC will just enter the

     Samsung announced a 128GB SSD drive during the talk.

     It is estimated that the SSD attach rate for notebooks will reach 20% in 2010.


0802.7  WAVE Comments

The conference swam in statistics on the growth of storage technology capabilities and how this would be used by consumers.

Certainly video and content sharing plays a major role in the rapid growth of storage consumption. Yet, there were a number of hints that consumers do not know what to do with all the storage capacity on the market today. For example, HDD have become a retail commodity. It is interesting that consumers do not buy on HDD size but price - $100 to $120. This supports the premise that there is more capacity than consumers need.

Storage is storage and just a commodity. Wrong. NAND flash has transformed products and created new market opportunities. The power of chip based storage was cited many times. It brings design flexibility, new product opportunities and new user scenarios. Even cited at the conference is how NAND enables a popular video camcorder in support of social networking. It is not that NAND and HDD compete but actually enlarge the market by creating new and/or extended products.

There are Federal mandates for HDD and Flash security. There is the potential for large litigation settlements when security is breached and even lives placed at risk due to data loss. It was cited that the industry is well behind and may find the rules for compliance come faster than can be accommodated. But we came away hollow – where are the solutions? The TCG, Trusted Computing Group, spoke several times on their efforts but these seemed years away. Storage security is a high pressure point with many forcing functions – something will happen.

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