Terabyte; isn't the right spelling, Amir?
Terabyte; isn't the right spelling, Amir?
They'll eventually go cheaper than what they were last fall. ...Perhaps this fall, before Christmas, on Halloween.
Oh great. Companies buy their competitors and then price stays inflated. Where is DOJ (Department of Justice) when you need it? http://www.pcmag.com/article2/0,2817,2405500,00.asp
Report: Hard Disk Drive Prices Won't Fall Until 2014
By Damon Poeter June 7, 2012 08:44pm EST 0 Comments
The PC industry is recovering from a hard disk drive (HDD) shortage caused by catastrophic flooding in Thailand last October, IHS iSuppli said this week that current high prices for HDDs won't return to pre-flood levels for several years.
But the current pricing structure for HDDs has less to do with the aftermath of the floods—after falling by 29 percent in the fourth quarter of 2011, HDD shipments have risen by 18 percent and 10 percent in the first two quarters of this year—then it is the result of consolidation within the HDD industry, according to IHS analyst Fang Zhang.
"HDD manufacturers now have greater pricing power than they did in 2011, allowing them to keep average selling prices (ASPs) steady," Zhang said in a statement accompanying the research firm's Memory & Storage Market Brief report. "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 of 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," Zhang added.
Prices for HDDs spiked in the wake of the Thai floods. ASPs skyrocketed from $51 in the third quarter of 2011 to $66 in the fourth quarter, a 28 percent price hike. Those average prices held through the first quarter of 2012 and only dipped slightly to $65 in the second quarter, according to IHS.
Zhang said HDD production is expected to recover completely and begin exceeding pre-flood levels by the third quarter of this year. But that doesn't mean prices will start coming down any faster, the analyst said.
"In the third quarter, shipments are expected to rise by another 10 percent to 176 million. This will mark the first time in 2012 that shipments will exceed their 2011 quarterly levels, up from 173 million in the third quarter of 2011. Despite exceeding pre-flood shipment levels in the third quarter, pricing is expected to remain inflated," Zhang wrote.
A big part of the reason for that is that a lot of PC makers, wary about not being supplied with enough HDDs in the aftermath of the shortage, have apparently signed long-term agreements (LTAs) with HDD makers that lock inflated prices into place for several quarters.
Zhang figures that "[e]ven if all the OEMs stop entering into LTAs by the end of 2012, it would take about four quarters with a 6 percent sequential decline in the HDD ASP to reach the pre-flood pricing level."
Such a decline in HDD prices isn't likely, however. According to the analyst there hasn't been a consecutive 6 percent sequential quarterly decline in HDD average selling prices in the last three years.
Combined with strong demand for storage capacity in both the consumer and commercial markets, including the growth of cloud storage, these supplier-driven factors are likely to "contribute to inflated HDD pricing throughout 2012 and 2013," Zhang said.
If IHS is correct, the PC industry won't see HDDs priced at pre-flood levels until at least 2014.
Is this similar to LCD flat panel price fixing like we have before?
Amir, the same goes for electronic fuel injectors and many other products. That Tsunami will affect the world for years to come.
In search of accurate reproduction of music. Real sound is my reference and while perfection may not be attainable? If I chase it, I might just catch excellence.
The best way to enjoy digital music reproduction is to never listen to a good analogue reproduction.
I post my own opinions except when posting as a moderator in green.
-----Was it today or yesterday that a huge Japanese dock showed up on the United States West coast beach? ...Precisely from that tsunami, and fifteen months later!