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.
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Douglas Perry was a freelance writer for Tom's Hardware covering semiconductors, storage technology, quantum computing, and processor power delivery. He has authored several books and is currently an editor for The Oregonian/OregonLive.
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BigBodZod VetteDudeThat's BullShit. Sounds like collusion and sounds pretty illegal.Reply
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.
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mouse24 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)Reply -
drwho1 This is bullpoop!Reply
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 -
fudoka711 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).Reply
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... -
A Bad Day 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.Reply -
jlopezst20 hah!! with the SSD threat looming in the horizon... they dare pull some bullshit trick like this one??Reply
@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?