The prices of hard drives will not fall until 2014

That is the main conclusion of the analyst IHS, which considers that the price level that had the hard drives before the occurrence of floods in Thailand are not reached again until 2014. This delay in the recovery of previous market outlook is due to a strategic move by the two leading companies in the landscape, Western Digital and Seagate, which with about 85% of total segment may impose a control on prices much greater than they had last year (do not forget that the two have closed over this year purchases of other competitors in the market as hard drives division of Samsung and Hitachi).

The prices of hard drives will not fall until 2014

The terrible floods that hit Thailand in autumn last year dwindled dramatically the market capacity of hard drives. The country is the second largest producer of components for manufacturing hard drives in the world, just below China, and their lands were generated nearly a quarter of total production. Especially infrastructures were damaged Western Digital, in the last quarter of 2011 had to reduce to 60% of its sales estimates for the impact brought about by this natural disaster.

According to data from IHS, the third quarter of this year will be the first in which figures are achieved shipments of hard drives that were recorded during the third quarter of 2011. Thus, it will total 176 million hard drives (up to 173 million recorded in the same period last year). This amount will result in a significant increase over the number of registered deliveries in the second quarter of this year (159 million) and the first quarter (145 million).

Despite clear evidence that the market signs of recovery that does not mean, as points from IHS, the prices of hard drives will lower the short term. Since the shortage caused by these floods, prices have inflated, reaching an average of $ 66 in the fourth quarter of 2011 and the first of 2012. The current price of hard drives is at half d and $ 65, a reduction faint though production has increased dramatically in recent months.

There are several factors that can cause prices to continue above the level of 2011. First, you have a highly concentrated market in which Western Digital and Seagate have established themselves as absolute rulers of the market with market share approaches 90%. Thanks to that power, now have control over prices tightened. Also keep in mind that in recent years the hard drives were lowering his price at a breakneck pace, while growing its capacity. This market dynamic forced companies to create an increasing amount of devices so that the profit margin was satisfactory and triggering over the current situation of oligopoly. Not surprisingly, manufacturers have taken advantage of this unfortunate situation to curb the market’s advance.

Leave a Reply

Your email address will not be published. Required fields are marked *