Higher Hard Drive Prices Are the New Normal 268
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."
New solid state storage (Score:5, Interesting)
Most articles I've seen indicate that rotational storage (and existing flash-based SSDs) will be replaced within 2 years by memristor-based storage or similar non-rotational, non-flash storage. It makes no sense for hard drive manufacturers to "race to the bottom" when they've already consolidated into 2 major manufacturers and sales have such a short term outlook.
Re:Really? (Score:5, Interesting)
You mean, companies will collude together in order to raise the price of goods in that market?
When there are only two or three competitors in a market, actual collusion is no longer necessary. They simply have an unwritten and unspoken agreement to keep prices where they are. Neither WD nor Seagate has anything to gain by cutting prices that they know their (only) competitor will match.
Regulators should have never allowed the Hitachi acquisition to happen. The HDD industry was already over consolidated.
Re:New solid state storage (Score:5, Interesting)
Given that hard drive technology is still having breakthroughs, it will be some time before SSDs can catch up in overall capacity, nevermind price per GB/TB.
Given the rapid decline in the number of write cycles at smaller process sizes, that may never happen with current flash technology.
Re:Really? (Score:5, Interesting)
The HDD industry was already over consolidated.
Really, Really? The previous margins were tiny; the current margins are thin. I like low prices, too, but I also like companies that produce quality products to stay in business...
Re:New solid state storage (Score:4, Interesting)
That's what technology like PCM [wikipedia.org] is for. As you shrink the lithography, PCM purportedly gains in reliability due to the reduced amount of material needed to actually store the bit.
That and, unlike memristors, you can actually buy PCM now [digikey.com], and while the price per MB is still quite high... it exists in volume and isn't vaporware, which memristors by and large still are.
Re:New solid state storage (Score:4, Interesting)
Where HAVE I heard this before?
Oh, yeah, now I remember!
Me: We should go ahead and buy the 85MB HD for the new comp - we'd fill up a 40MB too fast..
the Wife: No, it'll be YEARS before we could fill up 40MB - why pay the extra couple hundred for space we'll never use?
We had a similar discussion a few years later, with the players swapped, when we were debating 300MB and 500 MB.
And again when we debated 2GB v. 3GB.
And 20GB v 50GB
And 500GB and 1TB....
Re:Really? (Score:4, Interesting)
That's totally false. Intel would be trying to sell you an Itanic chip for 64-bit applications.
Remember, at the time, Itanic was what Intel was pitching to anyone talking about 64-bit.