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prices will remain high until 2014 thanks to long-term agreements between computer makers and hard drive makers

The massive flooding in Thailand last year significantly affected the ability of several manufacturers to produce hard drives used for data storage in computers and other devices. The flooding meant that much of the production capacity was unavailable and led to shortages and increased prices for available hard drives.
 
According to iSuppli, the price of hard drives isn't expected to return to pre-flood levels until at least 2014. That means for more than a year, prices will be inflated due to shortages caused by the flooding. ISuppli reports that the average selling price for the entire hard drive market grew to $66 in Q4 2011, which is up 28% from $51 in the third quarter. The average selling price held steady at $66 in Q1 of 2012 and is expected to slide to $65 in Q2.
 
The flooding in Thailand led to a 29% reduction in the number of hard drives shipped in Q4 2012. That significant reduction in shipments is expected to end and production will be completely recovered by Q3 of 2012. The company reports that hard drive shipments increased by 18% to 145 million units in Q1 2012 and in Q2 increase by 10% to 159 million units.
 
ISuppli is predicting that shipments will increase again in Q3 2012 by another 10% to 176 million units. Q3 is expected to be the first quarter where shipments or exceed 2011 numbers. Despite the return to normal shipment levels, pricing is expected to remain flat with no decline.
 
“HDD manufacturers now have greater pricing power than they did in 2011, allowing them to keep ASPs steady,” said Fang Zhang, analyst for storage systems at IHS. “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 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.”

One reason pricing won't decline is that a number of original equipment manufacturers in the computer industry signed a long-term agreements with hard drive makers to guarantee drive shipments but locking in prices about 20% higher than were paid before the flooding.

Source: iSuppli



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Samsung 1TB 7200RPM drive for $80 at Newegg
By SworDancer on 6/11/2012 10:31:44 AM , Rating: 2
From time to time Newegg offers the SAMSUNG Spinpoint F3 1TB 7200 RPM HD103SJ hard drive for just $80 (which is the current price at the time of this post). Which is a great price! This is actually the hard drive that I use, and it's fantastic! It's the best hard drive I've ever owned.




By SlyNine on 6/11/2012 11:21:49 AM , Rating: 2
I bought a 2TB one in early to mid 2010 for about 20$ more. $80 for 1TB certainly isn't that great a deal.


RE: Samsung 1TB 7200RPM drive for $80 at Newegg
By raabscuttle on 6/11/2012 12:09:48 PM , Rating: 2
And geeks is $99.99 for 1.5TB new Seagate. I think prices may fall faster than many expect.


By lagomorpha on 6/11/2012 8:08:59 PM , Rating: 2
One would hope for the sake of the harddrive companies you are right. If harddrive prices don't return to antediluvian levels earlier than expected than sub $200 480GB (big enough for most) SSDs are going to be very difficult to compete against.

Not to mention 240GB (big enough for many) will be around the $100 mark in 2014. As flash gets cheaper to produce at every die shrink and economies of scale push the price of SSD controllers down expect to start seeing 128GB SSDs cheaper than new HDDs of any capacity because all those mechanical components can only be made so cheaply.


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