27 million hard disk drives ship in CQ3; Robust CQ4 anticipated.

PALO ALTO, Calif.--(BUSINESS WIRE)--Nov. 5, 1996--TrendFOCUS, Inc., a leading market research firm specializing in the computer systems, disk drive, and data storage components industries, announced today in its CQ3 Quarterly Update of the Storage Demand Analysis System (SDAS) that the hard disk drive industry shipped a third-quarter record 27 million units.

According to TrendFOCUS, the disk drive industry's healthy performance was attributable to several factors. Primarily, PC shipments to commercial applications were stronger than anticipated in the summer quarter. Consumer demand remained weak. Second, although drive price erosion rates eased in the quarter, average prices were still down 6-plus %. This helped stir OEM and aftermarket storage demand. Third, as user storage requirements maintained an upward spiral, the buy/supply matrix in the 1.0 GB to 2.0 GB range was in good balance.

John Donovan, Vice President of TrendFOCUS, explained that the industry's third quarter performance is typically weak. "Stronger PC and server sales, combined with astute product planning and manufacturing execution by disk drive companies, caused better-than-anticipated performance and sets the stage for a good CQ4," he said. "PC and disk drive companies generally managed inventories quite well, so we are hopeful that the industries can accelerate through Q4 and into 1997 without an overhang of inventory."

The disk drive market has shipped more than 77 million units thus far in 1996, slightly lower than early-year expectations. "We target the market to ship nearly 110 million drives in 1996, another 20-plus % growth year for the rigid disk drive industry," added Donovan.

TrendFOCUS' SDAS CQ3 Quarterly Update also highlights many key issues in the computer systems and HDD markets, including: -0- -- PC shipments, particularly those to the corporate channel, continue to grow at a healthy rate. Consumer PC sales have been disappointing in 1996, despite continued system price declines. Demand for portable PCs is strong, although screen availability and system pricing are hampering sales. The average disk drive capacity in a PC surpassed 1.2 GB;

-- Server sales are booming, providing good incremental opportunities for disk drive companies. Average drive capacity in the server marketplace reached 2.5 GB in the quarter;

-- Disk drive pricing continued to erode in the third quarter, but at a milder 5% to 8% rate. This is in contrast with rapid quarterly erosions of 10% to 14% experienced earlier in 1996;

-- Seagate remained the unit shipment leader in disk drives, but Quantum, Western Digital, IBM, Maxtor, Toshiba and Fujitsu all posted strong sequential gains in unit sales. -0-

TrendFOCUS, Inc., is a leading market research firm specializing in the computer systems, disk drive, and data storage components markets. Founded in 1993, the company provides unique market research analysis and focused management consulting.

CONTACT: TrendFOCUS, Inc.

John Donovan, 805/693-9974