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A Year After Thailand Flooding, Hard Drive Prices Remain High 214

Posted by Soulskill
from the what-the-market-will-bear dept.
crookedvulture writes "Last October, Thailand was hit by massive flooding that put much of the world's hard drive industry under water. Production slowed to a crawl as drive makers and their suppliers mopped up the damage, and prices predictably skyrocketed. One year later, production has rebounded, with the industry expected to ship more drives in 2012 than it did in 2011. For the most part, though, hard drive prices haven't returned to pre-flood levels. Although 2.5" notebook drives are a little cheaper now than before the flood, the average price of 3.5" desktop drives is up 35% from a year ago. Prices have certainly fallen dramatically from their post-flood peaks, but the rate of decline has slowed substantially in recent months, suggesting that higher prices are the new norm for desktop drives."
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A Year After Thailand Flooding, Hard Drive Prices Remain High

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  • Re:Why not? (Score:3, Interesting)

    by ShanghaiBill (739463) on Friday November 09, 2012 @02:41PM (#41934207)

    why didn't they just "charge extra" before the floods?

    They didn't have an excuse they could fall back on if they ramped them up with no reason?

    No excuse is needed. Public companies have a fiduciary duty to their shareholders to maximize profits. If they were knowingly selling for less that the market would bear, without a sound strategic reason, they would be guilty of misconduct. Since most (all?) of these drives are imported, selling below the fair market price could also be illegal under various "anti-dumping" laws.

  • Re:What? (Score:3, Interesting)

    by Anonymous Coward on Friday November 09, 2012 @02:50PM (#41934327)

    If it's a Seagate 7200.14 then no, they're not the same.
    The variant they put in external enclosures is crippled via firmware to 150MB/s max transfer rate and has ~24ms average access time.
    The noncrippled ones do >200MB/s on the outer cylinders and ~18ms avg access time.

  • Re:Why not? (Score:4, Interesting)

    by Smallpond (221300) on Friday November 09, 2012 @03:14PM (#41934589) Homepage Journal

    Because the equiibrium was lower. Now one of the few players would have to charge less, but they have no incentive to do so. Game theory at work.

    Exactly. When their costs went up they all had to raise prices but when costs go down they can all wait for someone else to lower prices first. No collusion or cartel is required.

  • Re:Its the economy (Score:5, Interesting)

    by TopSpin (753) on Friday November 09, 2012 @03:27PM (#41934701) Journal

    QE3 is $40E+9 per month. Helicopter Ben is monetizing (printing) about 37% of our deficit. This eventuality has been predicted for the US for decades. Buy gold with cash and hide it.

    However, that's probably not the reason for the pricing histogram in the linked story. The prices of some models have fallen while others have remained high. That differential wouldn't exist if it were exclusively due to currency; exchange rates make no distinction between popular 2.5" disks and everything else.

    The models where prices have fallen are the high volume models that OEMs install in laptops and DVRs. Everything else remains expensive.

    That actually makes a lot of sense. OEMS buy those 2.5" drives under contract in large quantities. These are the lines that got highest priority to recover after the flood, so the supply of these parts recovered quicker and prices have fallen faster.

    Basically the flood caused a realignment of resources and this is reflected in the prices we see now.

  • Re:Why not? (Score:5, Interesting)

    by hairyfeet (841228) <bassbeast1968@NOspaM.gmail.com> on Friday November 09, 2012 @03:30PM (#41934725) Journal

    Because they actually had real competition before? Before the flood there were FOUR hard drive manufacturers, Seagate, WD, Samsung, and Hitachi, now there is only WD and Seagate. Since there is only two they will simply watch and match each other's prices, nice way to have a duopoly.

    But this is why competition is so important, just look at how quickly prices are falling and sizes growing in SSDs whereas with HDDs they seem to be stagnant, that's because as long as they simply match each other's prices they don't have to worry about price wars since its only the two of them.

  • Re:Why not? (Score:3, Interesting)

    by MyFirstNameIsPaul (1552283) <myfirstnameispaul@gmail.com> on Friday November 09, 2012 @03:49PM (#41934905) Homepage Journal
    But where this model fails is in the standard assumption that volume never changes, and this is wrong. Pre-flood I bought a 2 TB external HDD for my DirecTV DVR for ~$90. My 1 TB external HDD that I use for backups has been at it's limit for a while; in fact, I've been having fun finding all the stuff that I really don't need to backup. A few weeks ago I found archives that were truly worthless and saved myself about 300 (uncompressed) MB. If the price of a 2 TB external HDD had fallen to it's previous level, I would have just bought one and not bothered. I suspect I'm not the only person doing these kinds of activities. Yes, I realize I am a minority of the market, but in sum, we're probably talking about a substantial total volume of HDDs not being purchased.

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