HDD Prices Not Expected to Decline Until 2014
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.
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.
@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?
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.
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
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...
@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?
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.
Yep
What size? Different capacity hard drives sell for different amounts, so what does this mean?
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.
needs to be replaced more frequently.