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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."
Right, and your high school econ lesson makes it all ok. Sorry buddy, but history tells us when we hear "Oh no, prices really are higher. Its for your own good. Capitalism is working!!!" it means we're being shit on. And we've been shit on lately. A lot.
We've gone from a dozen HD manufactures to two. (In most spaces) This is a recipe for abuse. This is exactly the time anti-trust regulators start asking polite questions. If the companies don't get the hint, then less polite questions and embarrassing inquiries happen. It's at this point we start seeing emails between VP's suggesting they take advantage on a situation with euphamisims like 'cooperatively easing channel saturation'
Not to mention, that with so few parties and so much consolidation is why we got in to this mess in the first place. I'm sure as fuck mad that a flood in one part of one country was able to nearly cripple a dozen high tech industries. We need more players, with more manufacturing plants, in more diverse locations. It's in everybody's interest.