Although the overall client solid state drives (SSD) market has seen low demand during the pandemic, lockdowns and home working have had a positive effect on consumer-channel sales, according to the latest data published by Context.
“The impact of the pandemic on the client SSD market is clear when we look at revenues: growth in the first quarter has been followed by two quarters of year-on-year revenue declines,” says Gurvan Meyer, head of business analysis and business unit manager at Context.
“However, some of the strong demand in Q1 2020 was a result of the news of supply disruption as China and Korea felt the first effects of Covid in January. Sales were up as resellers aimed to put themselves in a position to overcome any problems with PC component supply chains.”
The Context distribution panel shows the dynamics of the pandemic-impacted client SSD market. Revenues from consumer-oriented customers – retail chains and consumer etailers – are growing by +7.2% year-on-year whereas those from the business channel – small and medium resellers and business-focused etailers – have dropped by more than -20% compared to the same period last year.
This is not unexpected given that business closures and economic slowdowns are affecting the ability of small and medium businesses to invest in computer equipment while a workforce based at home – and negotiating technology access with other members of their family – is purchasing more home-PC components.
Digging further into the client SSD market data, Context found that the greatest growth in Q3 2020 is in sales of 1Tb NVMe products. In fact, with +39% additional revenue year-on-year, this is the only type of SSD with increased sales; 63,9% of them were through the consumer channel, up from 52.9% a year ago.
These products are not the cheapest – an average 1Tb SATA SSD, for example, costs 30% less – and this tells us that the people driving up sales care more about performance than price. It seems that gamers and geeks spending more time than usual at home during the pandemic have been buying high-spec SSDs and so having a significant effect on the nature of the client SSD market.
Another interesting SSD data set is the price per GB, which is playing its part in the decline of revenues over the third quarter, says Meyer. The cost of 1Gb of storage has fallen -12% between Q3 2019 and Q3 2020.
Capacity demand is, therefore, not as low as the revenue drop suggests: distributors report that it has actually been flat year-on-year. The Q1 spike in price per Gb is a result of the high demand seen during that quarter, and the sharp drop in Q3 could be a consequence of resellers reducing prices to get rid of excess stock following low demand in Q2 and Q3.
“We expect the consumer channel will continue to drive the client SSD market over the coming quarters as some countries in Europe reimpose lockdowns. However, the decrease in the price per GB will certainly make it easier for financially uncertain businesses to make greater investments than in the last two quarters and this will also have a positive effect on SSD sales,” Meyer adds.