I’m one of the many millions of people around the planet wondering when, if ever, the prices for mechanical hard drives will drop to their 2010 levels ever again. In 2011 I recorded a price of just R420 for a 500GB hard drive, with 1TB drives from both Seagate and Samsung reaching all-time lows of R650. It was an insanely good deal at the time, considering that for the best part of a year since the Thailand floods and the Japanese tsunami the prices of those same drives have shot up considerably, sometimes to double their original price.
I’ve no problem with manufacturers raising their prices to accommodate funds for rebuilding their factories after a disaster. After Seagate bought out Samsung, I wasn’t surprised that the company dropped those long three-year warranties to make up for their losses. Analysts from iSupply (those geniuses who seem to have figured out exactly how much profit Apple makes off their products) have now said that the current market for hard drives might not settle this year. Or the next. Or the next one after that.
In a move to keep both companies above water, it seems that both Western Digital and Seagate will continue to inflate their prices on hard drives in order to make their respective acquisitions worth the trouble that they paid for them. Seagate in particular has already dropped prices thanks to consumer response to their merger with Samsung and the dropping of the warranties. They want people to buy more drives more often and that was the obvious play that the company could have gone for.
Western Digital, on the other hand, chose to keep its warranty levels and used the leverage thanks to their factories previously owned by Hitachi to keep drive shipments at a relatively high level. While WD didn’t suffer as much damage from the floods as Seagate did, the company still chose to play it safe and increased prices as well. Neither company has chosen to enter into the SSD race, opting to rather concentrate on earning larger margins through mechanical drive sales, especially for large RAID arrays.
For now, finding hard drives isn’t an issue as shipments around the world have recovered to their pre-2011 flood levels. But with no reason to drop prices anytime soon, expect both companies to only drop hard drive prices gradually. Seagate will move to drop prices sooner than Western Digital, though, as the last of the three-year warranties begin to expire in 2014.
Source: Tom’s Hardware
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