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Apple signals disk free notebooks way to go

Hard disk drive vendors watch out

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Apple's new MacBook Air is as cheap as the MacBook at £849, signalling the end of premium pricing for Apple's slim hinged flash slab.

When it was introduced two years ago the MacBook Air was priced pretty high but it had a great spec. It still does but the smaller 11-inch screen model is now priced like the entry level MacBook. For that you only get 64GB of flash memory; £999 buys you a 128GB flash memory model. The top-end 13-inch model has 256GB of flash for £1,349.

The entry-level MacBook has a 250GB hard disk drive and the 17-inch MacBook Pro has a 500GB one. Two years ago a MacBook could be bought with an 80GB hard drive. The base MacBook Air has almost as much flash storage as a 2-year old MacBook had. Flash is becoming a valid alternative for Apple notebook data storage.

Western Digital announced its results for the second calendar 2010 quarter yesterday, shipping more drives than before but making 32 per cent less profit than a year ago. This was due to an excess of disk drive supply for a market facing weaker consumer demand.

CEO John Coyne said he thought sales of flash-driven tablets like the iPad could reduce HDD growth by 10 - 20 per cent for the rest of this year and into 2011.

The impact of the iPad and coming tablets on netbook sales is now generally accepted, with Apple selling 4.19 million iPads in its latest quarter. But the aggressive MacBook Air pricing indicates that flash memory could haemorrhage into the notebook market as well. This time next year flash prices should be lower still providing 128GB for an entry-level MacBook Air or competitor. The only way for Apple competitors like Acer, Dell, HP and Toshiba to compete against the cheaper Airs is to produce their own flash-driven notebooks.

Once notebook users have experienced the fast boot, application load time and speedier experience overall from a flash-based notebook, they won't want to go back to disk drives for storing performance data. It's arguable that the same pattern will be seen in desktops.

In other words we could be looking at a prolonged period of lower growth in notebook and desktop hard disk drive sales, perhaps even no growth, and perhaps even worse.

In a call with analysts, Coyne said: "What I would say to investors is to look at the long-term demand for storage, the fact is the most appropriate solution for mass volume storage is hard drives and to look at the long-term progress the industry has made over the last 10 years. … We will continue on that fundamental trend line for the next 10 years."

The net of this for notebook and desktop users is that hard disk drives are for bulk data storage but data you want to access as fast as possible should be in flash memory. With Steve Jobs' ability to scent a trend well before competitors it could be the new MacBook Airs signal air is leaking from the hard disk drive balloon faster than we all thought, with consequent deflating effects on hard disk drive vendor sales and revenues. ®

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