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Exploring the Opportunities for the Removable Storage Industry
Removable Storage Market Analysis and Commentary
09 March 2020 - Removable storage media has been a fundamental component of CE and IT sales for over 30 years. It once underpinned the consumer love affair with content ownership, but now the landscape has shifted. Broadband speeds have increased rapidly, infrastructures have improved and a growing consumer confidence in cloud-based storage has placed less reliance on storage media. So, what does the future hold for the removable storage industry?
A recent report by Futuresource Consulting examined the opportunities for storage media to maintain relevance and re-establish influence through new market segments.
“Despite the challenges, removable storage shipments are in relatively good health,” says Mats Larsson, Senior Market Analyst at Futuresource Consulting. “Global demand remains strong, with over 1.1 billion units sold in 2018, although our forecasts do show a small decline of 1% per year through to 2023.
“Looking at the value, there’s less positivity. Price sensitivity is a complex combination of factors, ranging from raw material and component supply issues, through to trade wars and tariffs. In 2018, trade value dropped by 15%, and we expect a further 9% decline for 2019. With the pressure to maintain sales and margin, it is increasingly important for the industry to maximise opportunities for new revenue streams and improved profitability.”
Futuresource has identified a combination of technologies and applications that, together, represent a significant opportunity for vendors. Although none of these developments will be industry game changers on their own, they can be leveraged as a whole, giving momentum to an integrated drive for sales and profit.
Opportunities explored in the report include a variety of gaming products, with console, mobile, PC, VR and 8K all under the microscope. Dashcams, security products, drones and the impact of 5G on mobile hardware are also covered.
“As mobile network coverage continues to develop and improve, there are few countries that don’t provide access to mobile broadband networks,” says Larsson. “However, the associated demand for mobile hardware in emerging markets is centred around lower built-in memory capacity products, such as entry-level smartphones and older second-hand phones. From a removable storage perspective, we are seeing an increase in the demand for microSD cards, but also for other removable storage products in a way that differs from established markets. This is just one example of the new opportunities presenting themselves to savvy storage vendors, especially in the META region, but also in Latin America and APAC.
“With mobile games eating into the available capacity of a handset, there is also the potential for branded gaming microSD application cards, particularly in established markets. More than 50% of Android devices have a card slot and can run apps directly from application cards. Combine this with increasingly immersive games enabled by bigger screens and improved processing power, downloads can exceed 5GB, even if the initial download starts off at around 100MB.”
Data security is another area of opportunity. Cybercrimes and security breaches pose a serious threat to everyone’s data. As our daily lives continue to move online, the threat becomes more prominent. This clearly suggests a potential need for local home storage solutions.
“The time is right for removable storage media companies to educate end users about taking responsibility for the safety of their library of data files,” says Larsson. “Removable storage media solutions should play a key role in the home and office, and much more can be done to create better awareness of the risks involved in trusting a single remote storage option.
“With the removable storage sector no longer supporting a single major opportunity, successful products will be those that satisfy several hardware and application segments based on performance, price, branding and distribution. Localised approaches for different regions will be key as the market marches forward.”
For more information about this report, please get in touch with Leon Morris via firstname.lastname@example.org
Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.