Slashdot Mirror
Higher Hard Drive Prices Are the New Normal
An anonymous reader tips an article looking at the state of HDD pricing now that the market has had time to recover from the flooding in Thailand and a round of consolidation among manufacturers. Prices have certainly declined from the high they reached during the flooding, but they've stabilized a bit higher than they were beforehand. Quoting:
"Are things going to change any time soon? We doubt it. WD and Seagate both reported record profits this past quarter. In Q1 2011, Western Digital reported net profit of $146M against sales of $2.3B while Seagate recorded $2.7B in revenue and $93 million in net income. That’s a net profit margin of 6% and 3%, respectively. For this past quarter, Western Digital reported sales of $3B (thanks in part to its acquisition of Hitachi) and a net income of $483 million, while Seagate hit $4.4B in revenue and $1.1B in profits. Net margin was 16% and 37% respectively. With profit margins like this, the hard drive manufacturers are going to be loath to cut prices. After years of barely making profits, the Thailand floods are the best excuse ever to drive record income for a few quarters. All of this means that while we expect prices to gradually decline, holding off on a necessary purchase doesn’t make much sense."
Most articles I've seen indicate that rotational storage (and existing flash-based SSDs) will be replaced within 2 years by memristor-based storage or similar non-rotational, non-flash storage. It makes no sense for hard drive manufacturers to "race to the bottom" when they've already consolidated into 2 major manufacturers and sales have such a short term outlook.
Can You Say Linux? I Knew That You Could.
You mean, companies will collude together in order to raise the price of goods in that market?
When there are only two or three competitors in a market, actual collusion is no longer necessary. They simply have an unwritten and unspoken agreement to keep prices where they are. Neither WD nor Seagate has anything to gain by cutting prices that they know their (only) competitor will match.
Regulators should have never allowed the Hitachi acquisition to happen. The HDD industry was already over consolidated.
The HDD industry was already over consolidated.
Really, Really? The previous margins were tiny; the current margins are thin. I like low prices, too, but I also like companies that produce quality products to stay in business...
That's totally false. Intel would be trying to sell you an Itanic chip for 64-bit applications.
Remember, at the time, Itanic was what Intel was pitching to anyone talking about 64-bit.