HDD Prices Not Expected to Decline Until 2014

HDDs are currently selling for an average of $65, only marginally down from Q1 2012 and Q4 2011, when prices hit $66 due to a significant drop in product availability and a 29 percent drop in shipments. Prior to the catastrophic floods, the average selling price of a hard drive was $51, IHS said.

The HDD market has been recovering steadily, but has not yet caught up with demand. A total 145 million drives were shipped in Q1 and this is estimated to hit 159 million as HDD makers are bring manufacturing capacity back online. Q3 shipments should end up at 176 million units, IHS estimates, which will be the first time the industry can exceed year-over-year shipments since the disaster (173 million drives shipped in Q3 2011). According to IHS HDD production capacity should be fully available in Q3, but price decline will only follow with a substantial delay.

"HDD manufacturers now have greater pricing power than they did in 2011, allowing them to keep ASPs steady," said Fang Zhang, analyst for storage systems at IHS. "With the two mega-mergers between Seagate/Samsung and Western Digital/Hitachi GST, the two top suppliers held 85 percent of HDD market share in the first quarter 2012. This was up from 62 percent in the third quarter of 2011, before the mergers. The concentration of market share has resulted in an oligarchy where the top players can control pricing and are able to keep ASPs at a relatively high level."

Beyond the supply-side factors, "demand-related issues also will contribute to inflated HDD pricing throughout 2012 and 2013," IHS said. Windows 8 is generally expected to create demand for PCs and keep pricing of HDDs high.

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    Top Comments
  • Vettedude
    That's BullShit. Sounds like collusion and sounds pretty illegal.
    35
  • BigBodZod
    VetteDudeThat's BullShit. Sounds like collusion and sounds pretty illegal.


    I agree but who is going to whack them ?!?

    Certainly not the US and probably not the EU either, we have a defacto duopoly now, what can be done other then boycotting and essentially you not being able to purchase any more storage for quite awhile.
    26
  • jlopezst20
    hah!! with the SSD threat looming in the horizon... they dare pull some bullshit trick like this one??

    @VetteDude I bet it is a collusion, they must've seen some good profits from squeezing every dollar out of those HDDs... sigh... price fixing, anyone?
    18
  • Other Comments
  • Vettedude
    That's BullShit. Sounds like collusion and sounds pretty illegal.
    35
  • phamhlam
    HDD? What is a HDD? I only know SSD.
    -25
  • BigBodZod
    VetteDudeThat's BullShit. Sounds like collusion and sounds pretty illegal.


    I agree but who is going to whack them ?!?

    Certainly not the US and probably not the EU either, we have a defacto duopoly now, what can be done other then boycotting and essentially you not being able to purchase any more storage for quite awhile.
    26