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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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  • Why not? (Score:5, Insightful)

    by Severus Snape (2376318) on Friday November 09, 2012 @01:06PM (#41933835)
    If they can get away with charging the extra, they are hardly going to reduce their profit margins now.
    • Exactly, it's called "what the market will bear" and is generally the true factor that decides price, not that supply/demand stuff which is total BS as far as the consumer is concerned.

  • What? (Score:2, Insightful)

    by Anonymous Coward

    Before the flooding, I bought a 1TB drive for ~$85. During the flooding, I saw those jump to ~$135. Last week, I bought a 1TB for $70.

    They're still high?

    • Re:What? (Score:4, Informative)

      by Anonymous Coward on Friday November 09, 2012 @01:16PM (#41933927)

      You overpaid pre-flood. Pre-flood, you could get 2TB 3.5" 7200RPM for around $60-$70. Now it's about $90-$100 and usually with a shorter warranty duration than pre-flood.

      All I'm gonna say is these higher prices better result in the new technologies (HARM/BPM/etc) coming to market.

      • Pre-flood, you could get 2TB 3.5" 7200RPM for around $60-$70.

        Nonsense. I was building a big server around that time and was keeping a very close eye on prices. The cheapest I ever saw was $89, and that was for a 5400RPM drive, not a 7200RPM. And the $89 was a sale.

        • by jlv (5619)

          I'll concur with this -- I never saw the "pre-flood" regular price for 2TB at $60-70. I did see 1.5TB at $65 regularly, and did pick up 2TB drives for as low as $75 (pre-flood) -- but that was the cheapest I ever saw them.

          Only in the last two weeks I have finally seen 1.5TB for $70 or less from multiple vendors. This week has been the first time I've thought we've hit "pre-flood" prices.

    • by tloh (451585)

      Yeah, I have been watching prices as well and I've observed that, although slightly inconsistent, they do seem to be normalizing. Last week, I snagged a deal at newegg for less than $45/TB for a 3TB external. Some in the comments revealed that upon cracking open the enclosure, the actual drive is one of the vendor's fastest model. Bought separately, the bare drive would have costed $30 more. It is unclear to me at this point what is actually happening, but I'm happy to have bought a HD at a reasonable p

      • Re: (Score:3, Interesting)

        by Anonymous Coward

        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.

        • 18 ms access time? My SCSI 160 drives deliver a 2ms access time. Why the hell are we content on moving backwards?
          • by guruevi (827432)

            You may be confusing access times but even if you aren't, your SCSI drive was probably a single-platter (which was common back then) while the current beasts are 4 platters. I think the current maximum is 1TB/platter and you'll find 4 of those in the 4TB drives.

          • My SCSI 160 drives deliver a 2ms access time.

            I'd love to see a mechanical HDD with such speeds. You are confusing something there, mate.

      • by mattack2 (1165421)

        Yeah, I didn't RTFA, but at least in the Fry's/Best Buy ads of the week, the drives seem to have come down to about the same price.

        There was a 4 TB drive at Fry's for under $200 a few weeks ago. External 2 TB drives are showing up at $89.

    • You got a bad deal beforehand, I was buying my 1 TB drives for $50.
    • by gman003 (1693318)

      The price of the same drive has dropped, but the average price has not. Logical conclusion then is that people are buying more expensive drives than before.

      It actually makes some sense given the rise of SSDs. People who would have been satisfied with a small hard drive are now opting to get a similarly-sized but far faster SSD. So the bottom end of the market has shrunk, moving the average up.

      That's just my conjecture, but it seems logical. The best way to test would be to compare similar market segments -

    • As has been mentioned already, you could get 2TB for that price back then. You are also forgetting that after a year, you would be able to get more TB for the same price. Given that, you would think you could get 2.5TB or more for ~$85 now, but that is certainly not the case.
    • About a 18% increase in price from 20 months ago -- Seems pretty high to me.

      Last year, March 2011

      $69,99 / 1.5TB, Western Digital WD15EARS Caviar Green Hard Drive - 1.5TB, 3.5", SATA-3G

      That was on sale, $10-20 off, I don't recall. And not the best drive certainly.

      Today, the closest match I can find is:

      $109.99 / 2TB, WD Green WD20EARX 2TB Desktop Hard Drive - 3.5", SATA, 64MB Cache

      Disregarding possible firesales, and slight markup going to higher data density 1.5 to 2.0, and general reduction in price o

  • Sale is over, but Newegg sold 1TB Hitachi DeskStars, which actually are reliable now (I have some that have been spinning nonstop for 2 years) for $60 apiece. That's around $0.058 per gigabyte before formatting...not bad at all. http://www.newegg.com/Product/Product.aspx?Item=N82E16822145304 [newegg.com]

    Yes, while the regular price is $80, you've always had to get drives when they're on sale if you want a really good deal, anyway. Same actually goes for SSDs.
    • by Hatta (162192)

      A year ago you could get 1.5TB for that price.

      • by ilikenwf (1139495)
        There were 1.5TB WD Green drives for $65...I just didn't want a slow green drive...and I heard they aren't as good for RAID.

        By the way, my DeskStar has 5 year warranty...
        • by rnturn (11092)

          "and I heard they aren't as good for RAID."

          Yep. WD used to not support the Blue, Green, and Black drives in RAID setups. (I ran into this about a year ago.) WD now seems to support RAID0 and RAID1. RAID5 still doesn't appear to be officially supported by WD and I'm not sure what Seagate's current policy is on consumer class drives and RAID. I had nothing but headaches trying to get a pair of Green drives to work in a RAID1 setup. The raidset would go offline at the drop of a hat. The problem was related t

    • by timeOday (582209)
      I'm surprised 1TB drives are still even relevant; they've been available since 2007 [pcworld.com] - five years ago. Six years before that, in 2001, 100 GB drives were the latest thing [pcworld.com]. Go back another 5 years to 1996 and 2.5 GB was it! The 1990s, those were the days for PCs. Your $3000 PC was obsolete by the time you un-boxed it.
  • by Anonymous Coward

    Good old mechanical hard drives will be around for a long time but at least the flood sparked some serious competition with pricing in the SSD market.

  • by thetoadwarrior (1268702) on Friday November 09, 2012 @01:22PM (#41933997) Homepage
    I feel sorry for the people who think prices will go back to what they were.
    • by MightyYar (622222)

      They look like they are going down to me. It's hard to directly compare, because the models change - but in general prices have been falling. I'm waiting for 3TB to fall below $100 to add capacity to my NAT.

      Here's one model that is nearly back to where it started. [camelegg.com]
      Here's an external in the same situation. [camelegg.com]

    • by jandrese (485)
      I don't see why not. The flood didn't knock any of the companies out entirely AFAIK, so the same market forces that originally pushed hard drives down to bargain basement prices are still there. It does take time, and the companies involved probably can't slash their prices quite as much right now because they have to pay for repairing flood damage and missed sales. Give it another year or two and prices should settle back into the old pattern I bet.
    • by rwise2112 (648849)

      I feel sorry for the people who think prices will go back to what they were.

      Exactly! As long as SSDs are more expensive, we aren't likely to see them come down.

  • Yes, accurate. (Score:4, Informative)

    by DarthVain (724186) on Friday November 09, 2012 @01:30PM (#41934085)

    I bought a 2TB WD for 69.99 pre-flood. They are still about 100$ right now (95.99$). So yeah, 30-35% over what they used to cost.

    About the only glimmer of hope is that the 3TB has come down in price to about 130$ (129.99$).

    So the 3TB is 0.043 a GB and the 2TB is 0.05 a GB whereas it was 0.035 for a 2TB pre flood.

    So in larger format drives it is still approching the older pricing at a somewhat faster rate.

    That said, the unwritten rule about just about ANY computer technology is that wait a few months and whatever it is will be cheaper. HD's have bucked that trend due to the flood, and the (all) companies profiteering from it. That is what you get when you have an industry that has consolidated and consolidated until there are only a few companies out there. The BIG question out there is if there is any intentional collusion going on to keep prices high, much like just about everyone suspects of oil, but nothing is ever done.

    • Re:Yes, accurate. (Score:4, Insightful)

      by alen (225700) on Friday November 09, 2012 @02:18PM (#41934615)

      not collusion but more like why spend all this money to rebuild a factory or bring a flooded factory to 100% of pre-flood capacity if the prices will only drop?

      they rebuilt enough capacity to just meet demand and that's it

    • That said, the unwritten rule about just about ANY computer technology is that wait a few months and whatever it is will be cheaper.

      Not entirely accurate. You will get more (bytes, pixels, features) for the same price.
      Items that were sold before will get cheaper, but will disappear from the market as soon as they hit some threshold price and are replaced by the next generation.

      • by mattack2 (1165421)

        Cheaper per unit.. You knew what he meant.

        You're not the kind of person who goes and buys everything at the "dollar store" because "oh, it's just a dollar", even though you're paying twice as much per ounce, are you?

        (Don't me wrong, while I don't go to them often, they DO sometimes have good deals.. but you DO have to compare the per unit price. Though for some things I would buy the larger one at the same unit price, if it meant less packaging. Sometimes there's more packaging [every single item in the h

  • by Giant Electronic Bra (1229876) on Friday November 09, 2012 @01:32PM (#41934103)

    I think it is just a sign that the market is no longer really competitive. There are too few vendors left in the business (basically what, 3 actual manufacturers are left now at this point).

    Frankly I doubt this is going to continue for long. With more and more storage moving online (much more efficient use of drives on average), less desktops, movement of desktop and laptop storage to SSDs with falling SSD prices there is just not going to be the demand long-term. In fact the increased prices right now may just represent a need for these businesses to recapitalize and drive R&D. The only justification for hard drives is going to be sheer size (IE mb/$, mb/m^3, mb/watt) and that requires a lot of R&D to keep driving those numbers in a positive direction.

    • Yep: http://en.wikipedia.org/wiki/List_of_defunct_hard_disk_manufacturers [wikipedia.org]
      And Toshiba has only about 10% of the market: http://www.tomshardware.com/news/wd-seagate-toshiba-hdd-hard-drives,17227.html [tomshardware.com]

      I'm not so sure about the imminent demise of the spinning platter. Homemade video (didn't GoPro release a 1080p60-cam recently?) and high-res photo's are still on the rise and the existing data isn't going anywhere. Well, the stuff that people really care about, at least. I wouldn't trust any childhood memories to

    • by Solandri (704621) on Friday November 09, 2012 @03:07PM (#41935083)

      I think it is just a sign that the market is no longer really competitive. There are too few vendors left in the business (basically what, 3 actual manufacturers are left now at this point).

      Arguably, the state of the HDD industry before the flooding was that it was too competitive. It had some of the lowest margins in the tech industry, resulting in big research names like IBM deciding it wasn't worth it and jettisoning its entire storage division (sold it to Hitachi, who after a decade decided the same and sold it to WD).

      So the pricing we're seeing now may actually be closer to where prices should have been for a thriving industry. We're not down to 2.5 manufacturers (Toshiba doesn't make 3.5" drives) because of some grand conspiracy to corner the market on HDDs. We're there because HDD prices were too low for all the other manufacturers to stay afloat, resulting in them merging and being acquired. The extremely low margins meant the process overshot, and there are now fewer manufacturers than you'd expect in a healthy industry.

      • Just to throw something crazy out there: Does the HDD industry need to "thrive"?
        How much more storage does the typical user really need? This is similar to the question of how fast of a processor does the typical user need. They've done wonders with HDDs the past and it's been fantastic. But why not shift to solid state? Flash drives can be smaller and store enough information for a lot of uses. Not all, of course, but it'll service most of the consumers' needs.
        Can't hard disk drives just be an end-stag
    • by mu51c10rd (187182)

      Perhaps...but where do you think the cloud vendors get their storage drives from? Just shifting from the consumer to the provider market.

      • Giant shared disk storage arrays are going to have much higher utilization than individual drives in people's homes, which are probably on average 50% full (and are also probably full of useless crap). Add in the deduplication capabilities that the current generation of storage arrays are equipped with and you could have order of magnitude decreases (since I'd bet that 90% of the bulk of storage is the same movies and MP3s over and over and over again). A million people might have a million Terabytes of har

  • by carrier lost (222597) on Friday November 09, 2012 @01:35PM (#41934143) Homepage

    It's quite possible that there might have been some HDD or sub-assembly mfgrs who were just hanging on, what with the constant shrinking in the desktop market.

    The flood might have just pushed some of them over the edge, so to speak.

    • I think it's simpler.

      The technology was in danger of being replaced with SSDs. You would be CRAZY to create a new HDD plant at this point.

      If I were a manufacturer, I would put the insurance money into expanding SSD production. The flood is a golden opportunity to retool.

      The only thing that sucks for consumers is that production dropped a couple years before it should have. It pushes prices of HDDs up, but pushes SDDs down.

      • The technology was in danger of being replaced with SSDs. You would be CRAZY to create a new HDD plant at this point.

        I think it might be a combination of both - inability to recover and/or shrewd reasoning.

        After all, there's still a market for tape drives, indicating that no matter how fast, light and cheap SSDs become, HDDs might still offer an attractive alternative (especially with new media technologies).

        Can you ever have too much storage?

  • Inflation (Score:2, Insightful)

    by hackus (159037)

    If you are pricing the hard drives in Federal Reserve notes, you are going to find that although the floods did have a market response to prices, something has also happened in the past several months.

    The Federal Reserve Note is dying. Purchasing power of the dollar is being cut drastically in just about all areas not just hard drives.

    I doubt it will improve any time soon. One use to be able to track gold and silver to get a pretty good guess on the health of a fiat currency. Now, that is pretty much imposs

    • Re:Inflation (Score:5, Informative)

      by ShanghaiBill (739463) on Friday November 09, 2012 @01:54PM (#41934371)

      The Federal Reserve Note is dying. Purchasing power of the dollar is being cut drastically in just about all areas not just hard drives.

      Inflation is very low by historical standards. Since the floods, the dollar has been flat against the baht and yen, and has risen against the euro. We haven't been doing quite as well against the Swiss franc, but we don't buy HDDs from Switzerland.

      • Re: (Score:3, Insightful)

        by Maltheus (248271)

        Throughout most of America's history there was hardly any inflation at all. Now, you'd be hard pressed to find a food or energy product (necessary basics) that hasn't doubled in price over the past 10 years.

        The CPI calculations were so heavily rigged by the Carter and Regan administrations, that they no longer have any basis in reality.

      • by sdguero (1112795)
        It is only at historically low levels if you look at the "official" numbers which report ~2% inflation. If you look at CPI inflation, which takes gas, food, and the things that normal people actually buy (vs multi-millionaires' investments and employee salaries) into consideration, inflation is currently around 6% and has spiked over 10% during the last 4-5 years.

        It's not a pretty picture and a topic that the federal reserve and politicians (other than a few independents) have been avoiding like the plag
        • You're very wrong. The CPI is exactly what you suggest we do - they check prices of common consumer goods in real stores. If the government bogeyman scares you, look at MIT's billion price index [mit.edu]. It's an online survey of many prices, updated in real time. And it matches the CPI very accurately [washingtonpost.com].
      • by Rockoon (1252108)

        Inflation is very low by historical standards.

        Standards. Funny word, that.

        Which 'standard' are you measuring inflation by? They change the CPI standard every 10 years.
        If you use the pre-1980 standard for CPI, then the current annual inflation rate is over 10%.
        If you use the 1980 to 1990 standard, then the current annual inflation rate is 5.5%.
        If you use the current post 2010 standard, then the inflation rate is 2%.

        What we are currently measuring is historic levels of bullshit manipulation of CPI. Stop being a drone.

      • by hackus (159037)

        The problem as I originally stated was the currency system is rigged. The central exchanges for currencies float their relative value against each other based on the Petro dollar, which like I said is rigged.

        So you are measuring a so called "flat inflation" against other currencies using a rigged system.

        If there are differences, you should pay attention to their relative weight with respect to oil consumption per fiat, not directly to each other.

        People have this mistaken idea that currency exchanges measur

  • Its the economy (Score:3, Insightful)

    by randomErr (172078) <ervin...kosch@@@gmail...com> on Friday November 09, 2012 @01:42PM (#41934223) Homepage Journal
    In the US we has some thing called QE2 and QE3. QE stand for Quantitative Easing [wikipedia.org]. The practice is to have a central bank but up assets of a failing companies and print money to pay for it. Printing the money causes inflation. This probably is the easiest way to explain [youtube.com] was inflation.

    Our money is worth less now. So it takes more cash to buy the same amount of goods. The cost is compounded by other factors like shipping and labor.

    Unfortantley for the United States QE3 is now unlimited. QE1 and QE2 both had ceiling so we could only cause so much inflation on ourselves. But with QE3 our central bank, The Federal Reserve, has an unlimited ability to print as much money as it wants.
    • Re:Its the economy (Score:5, Informative)

      by ShanghaiBill (739463) on Friday November 09, 2012 @02:12PM (#41934569)

      Our money is worth less now.

      No it isn't. Most HDDs are made in Japan and Thailand. Since the floods, the dollar has not declined against either the yen or baht. US domestic inflation is very low, and Japan has actually had deflation (negative inflation) since the flood. So a dollar should buy more, not less.

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

      by TopSpin (753) on Friday November 09, 2012 @02:27PM (#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.

  • by technosaurus (1704630) on Friday November 09, 2012 @01:45PM (#41934269)

    Its a pretty simple strategy. Buy out as much of the competition as possible to help control supply. If anything causes increased demand or short supply, raise prices immediately and then only lower them when absolutely necessary to keep regulators off your back. Does this sound like gas prices? I think so. Remember when diesel prices were lower than gas at least all summer? It may not be a monopoly, but when a few major companies own the market and have an unwritten non-compete agreement, it may as well be (recall a similar issue the lcd monitor price fixing case)

    • by green1 (322787)

      Just to be clear, I agree with your overall point, but your view of diesel vs gas seems to be skewed. Diesel prices should be lower than gas, diesel takes less work to refine than gasoline. Around here diesel is cheaper than gas all summer, but equal price or more expensive all winter (the same production lines used to refine diesel are used to refine heating oil for the east coast, so demand goes up in the winter)

  • by citylivin (1250770) on Friday November 09, 2012 @01:55PM (#41934379)

    I have also noticed that you are paying a huge premium now for even a 3 year warranty. Most seagate drives now come with a ridiculous 1 year warranty on them, so I wont even look at them any more. WD is not much better, with their green drives being 1-2 years. If you want 3-5 year you are paying 50% more for the drive. For example a 2tb WD black (5 year warranty) has a non sale price of $199 ( http://www.ncix.com/products/?sku=58376&vpn=WD2002FAEX&manufacture=Western%20Digital%20WD&promoid=1230 [ncix.com] ) whereas the same drive albeit "green" with a 2 year warranty is $119 non sale price ( http://www.ncix.com/products/?sku=62047&vpn=WD20EARX&manufacture=Western%20Digital%20WD&promoid=1230 [ncix.com] ).

    Its a shame because I was looking at old invoices and in 2010 I was buying 2tb drives with 3 year warranties standard for 80 bucks.

    Sure they claim to have more "features" with their different colour codes, but it does seem like they just decided 3 years should no longer be industry standard for a warranty. Probably some sort of collusion as they all pretty much changed their warranties at the same time. With seagate, they used to pride themselves in having 5 year warranties. And having recently RMA'd a 1TB drive from 2008, I am glad for that.

    Most HDD's die within 3-5 years. So a 1 year warranty is useless except for straight off the truck failures. Arguably, this is more sensible for the company, however it sucks ass for consumers who are used to having a standard 5 year warranty, an artifact of the storage wars of the mid aughts.

    So I am not surprised, but not many people are talking about this, which is surprising. Glad to see a slashdot article about it!

    • by gman003 (1693318) on Friday November 09, 2012 @02:20PM (#41934629)

      There's more difference than just the warranty between the Green and Black.

      WD has three "labels" for consumer drives: Green, Blue, and Black. Green drives are 5400RPM "power-efficient" drives, and new capacities generally show up here first as it's easier to increase density at low speeds. Blue and Black drives are both 7200RPM*, but Black usually has larger cache and is marketed at "enthusiasts", while Blue is aimed at "mainstream".

      So I guess they also consider a lengthier warranty to be an "enthusiast", not "mainstream", feature.

      * I think on their mobile side it's different, with notebook Blue drives still being 5400RPM, but I don't recall for sure and don't feel like checking.

    • Meh. For individual HDs extended warranties are rarely worth it. Your drive dies, you have to figure out who to contact for an RMA. Then you have to ship it and wait and get a refurb. While potentially compromising data is out of your hands. For $80 or so....

      At my little hospital we just make magnets out of the dead drives. It's just not worth the hassle. YMMV of course, but for small numbers it just doesn't add up.

      • WD has an express RMA that has worked well for me over the years. Very easy to do online and you have the option to cross ship the replacement drive.
      • Hard drive companies have had advance replacement for a while. One of the reason I went seagate before the warranty shenanigans was for the 5 year and I've replaced quite a few drives over the years. Most people I reckon don't use their hard drives 24/7 so don't end up using the warranty before it is up, if you use your hdd's a lot warranty matters since the failure rate is much higher on drives in constant use.

        It's only a hassle if you can't be bothered to use your credit card to have an advance replacem

    • by Maltheus (248271)

      Most HDD's die within 3-5 years.

      Hmmm. I've had many hard drives and plenty that arrive dead or fail within the first three months, but I'm not sure that I've ever had one that failed, after it's proven itself for more than a year. I've gotten to the point where I won't even use a drive, unless it's proved itself (as a backup HDD) for at least a year.

  • Because if I can buy a 2tb external hard drive for 79.00 why the fuck does it cost me 79.00 for a 1tb internal?

    It doesn't it's artificially inflated. So I end up with external enclosures along with my drive purchase.

    Bastards.

    • by AK Marc (707885)
      Almost all externals are 5400, and with low caches. I wouldn't be surprised if drives that fail one of the more stringent tests are allocated to external use. After all, or externals you are buying space, not performance.
      • by dan_bethe (134253)
        I have been told that external drives can possibly be comprised of a new enclosure for a remanufactured drive. That's one reason I've been told that the prices can be so low. So watch out for that, in addition to the warranty. I guess a person could call the company and ask, but they often don't know what's in the enclosure at all for an exact external drive order -- not even the drive's manufacturer or model.

        So in order to be sure that we're getting a high quality deal, we just have to pay a lot more.
    • by couchslug (175151)

      At that cheap I'd cheerfully toss the enclosure in my spares/rescue equipment box and call it good.

  • Any excuse to raise them, but never bring them back down. Sort of like taxes work to, come to think of it.

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