Mechanical storage is going to suffer, due to the new SSD technology advancing.
The storage industry has to adopt a new technology and create new products that are out of line with what they have been making so far.
Plus we are in a recession and demand is lower.
This analyst is talking about business cycles - they've been going on in the hard drive industry for decades. Every generation of hard drives starts out with high profit margins which gradually erode as supply increases.
The hard drive manufacturers know that reliability is very important. Entire companies have died because they received a reputation for drives that fail.
The way manufacturers keep demand up is to regularly lower prices on existing drives and introduce new drives with higher capacity (and profit margins).