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HDD Prices Not Expected to Decline Until 2014

By - Source: IHS | B 48 comments

The Thailand floods of 2011 will be impacting HDD prices for some time. In addition to the shortages, a new market environment is favoring higher prices and pre-flood levels will not be reached until 2014, market researchers at IHS said.

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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  • 35 Hide
    Vettedude , June 7, 2012 11:43 PM
    That's BullShit. Sounds like collusion and sounds pretty illegal.
  • 26 Hide
    BigBodZod , June 7, 2012 11:57 PM
    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.
  • 18 Hide
    jlopezst20 , June 8, 2012 12:09 AM
    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?
Other Comments
  • 35 Hide
    Vettedude , June 7, 2012 11:43 PM
    That's BullShit. Sounds like collusion and sounds pretty illegal.
  • 26 Hide
    BigBodZod , June 7, 2012 11:57 PM
    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.
  • 7 Hide
    mouse24 , June 7, 2012 11:57 PM
    They are decreasing in price, just a few months ago (4 ish) a spinpoint F3 was selling for 140 bucks 109 (and on newegg there is a 30 dollars off promo code)
  • 7 Hide
    mouse24 , June 7, 2012 11:58 PM
    damn you brain! "they are now selling for 109" is how it should have read.
  • 8 Hide
    drwho1 , June 8, 2012 12:02 AM
    This is bullpoop!
    Hard drives prices have been declining for a while now....
    Granted, they are not where they should have been (without all this nonsense)
    2TB drives used to be at $79 before this fiasco, now they can be found for $99-$109
    so still "not quite there yet" but no way that this article can be taken seriously.

    Still waiting for the 5TB drives for $120 or so... now THIS I might have to wait till 2014-2015
  • 10 Hide
    fudoka711 , June 8, 2012 12:06 AM
    The 2TB WD Caviar Black I've had my eye on for a few months now dropped in price by $30 on Amazon in the past week (and there's a $30 promo on NewEgg, not coincidentally I assume).

    But I highly doubt the prices will drop by that much even by Christmas. Ah, remember when we could get 2TB HDDs for 89.99 during Christmas? And 89.99-109.99 the rest of the year? The good old days...
  • 5 Hide
    A Bad Day , June 8, 2012 12:07 AM
    Collective price gouging. I should invest in those HDD companies because higher profit margins should boost profits, which typically give investors and stock market analysts a high.
  • 18 Hide
    jlopezst20 , June 8, 2012 12:09 AM
    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?
  • 15 Hide
    thepieman , June 8, 2012 12:12 AM
    I still fondly remember that time when I bought a 2TB caviar green for $70...
  • 10 Hide
    jupiter optimus maximus , June 8, 2012 12:13 AM
    #$!* Should have bought twenty 2TB WD Caviar Blacks at $90 when i first read news of HDD shortages in Thailand.
  • 7 Hide
    leongrado , June 8, 2012 12:31 AM
    Oh well. As long as SSD prices go down I could care less.
  • 5 Hide
    jaquith , June 8, 2012 12:38 AM
    Considering that the World economy is in technically a 'Depression' they can dream on or swim in their HDDs. Over the past few months the Spinpoint F3 has dropped from a peak of $165 down to $80 from it's $65 low or pre-flood pricing.

    The reports that I brought to TH attention stated early 2013 for Supply and Demand to level-out.

    Last Global PC Sales showed negative year-over-year growth.

    Further, as SSD approach parity of HDD costs the HDD's are going the way of the Dodo Bird.
  • 6 Hide
    spasmolytic46 , June 8, 2012 12:39 AM
    First and foremost I'll be doing my part by not purchasing any more HDD capacity until prices drop to pre-flood levels and come with the old 5 year warranties. Secondly, if that really does take till 2014 I may start implementing alternate storage methods, Blue ray for long term storage is now looking pretty good. Thirdly, SSD's are getting cheaper by the quarter and the HDD's might lose a lot of their competitive advantage. Fourth, any idiot betting on the future of their business expanding with windows 8 to sell a lot of volume ought to be demoted.
  • 3 Hide
    Wamphryi , June 8, 2012 12:50 AM
    I also am refusing to purchase HDD's until the costs return to where they should be. I have been encouraging customers to buy SSD instead. As spasmolytic has pointed out blu ray is a good alternative and one I have made full use of.
  • 4 Hide
    TheProudNoob , June 8, 2012 1:17 AM
    I bought a 2TB HDD and I now have a 120GB SSD, so I'm not going to have to upgrade for at least 3 years... 1.62TB free / 77.6GB free.

    Yep :D 
  • 6 Hide
    adgjlsfhk , June 8, 2012 1:26 AM
    "HDDs are currently selling for an average of $65"

    What size? Different capacity hard drives sell for different amounts, so what does this mean?
  • 12 Hide
    TidalWaveOne , June 8, 2012 1:36 AM
    Good thing SSD prices are falling fast.
  • 2 Hide
    DRosencraft , June 8, 2012 1:41 AM
    While there is logic to a part of their argument, I don't buy that it should take that long. Just looking at the numbers you can understand that a couple months of decreased output when you're talking about meeting a quarterly demand that reaches between 145 and 160 million units. Don't recall precisely, but if those plants were already working at full capacity when they went down, and no new plants have been built in the nine or so months since, it isn't unreasonable that they would have a little trouble catching up with demand again.

    That being said, prices are already coming down and should continue to do so until they do reach their former pre-flood price level. The only impediment will be demand. As long as demand remains high they won't have any incentive to drop prices any faster. They'll keep putting a new floor in to make more money, milking the continued hesitance of average consumers to jump in with SSDs.

    Finally, I would note that this is an IHS report. They're analysts and researchers, which means they're making a best educated guess. They could very well change their mind tomorrow if someone showed them something different. No need to worry too much.
  • 3 Hide
    Anonymous , June 8, 2012 1:55 AM
    They aren't holding the consumer market for ransom. They are milking the IT world where MANY HDDs
    needs to be replaced more frequently.
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