TechSpot

Inflated prices produce record revenue for hard drive makers

By Shawn Knight
Jun 13, 2012
Post New Reply
  1. Last week IHS iSuppli published a report on the state of the hard drive market. In it, they chronicled how mechanical drive prices soared following the October 2011 floods that ravaged Thailand where key manufacturing plants exist for Seagate and…

    Read more
     
  2. ...and you know they probably cut wages blaming the disaster. That and this price-fixing means pure sweet profit for them.
     
  3. Ranger1st

    Ranger1st TS Enthusiast Posts: 268   +77

    I don't need new storage so it's a moot point for me, however I like that these mechanical storage guys are acting all arrogant, gives the SSD guys a chance to sneak in the back door and ' layeth the smackdowneth ' on them.. ( haven't been able to use that line in ~ 10 years, awesome). Perfect example is RIm.. sitting on it's laurels and boom, iphone products owned them.
     
  4. captainawesome

    captainawesome TS Guru Posts: 414   +42

    fricken price-fixing scum.
     
  5. cliffordcooley

    cliffordcooley TechSpot Paladin Posts: 6,091   +1,519

    Its no surprise they are seeing record highs, when they tripled the price of HDD's after the flood.
     
  6. So the hard drive industry took a hit to production but can still turn a record profit immediately after? I think that tells you that they, the hard drive industry is screwing us so hard my brain hurts just thinking about it. We seriously allow this to happen? I think we the consumers are getting played by a bunch of greedy fat cats in suits. Grow some brains people and stop buying their crap and the prices will go down.
     
  7. Wagan8r

    Wagan8r TS Guru Posts: 593   +47

    I find it ironic that you lambaste the "fat cats" for utilizing the exact same market solution that you prescribe. It's supply and demand economics. They didn't steal money from people to make their profits rise. They charged a price; people paid said price. If people don't want to pay, no one is forcing them to.

    It's exactly the same can be said about Apple products. In my opinion, they're WAY overpriced. BUT, obviously, there are many people who do not think they're overpriced, and so they buy their products; thereby giving Apple record profits. Again, no one is forcing anyone to pay they're asking price.

    The difference here is that the hard drive manufacturers actually had supply problems, causing demand to rise, whereas Apple never has supply problems (everything is already your fault anyway with Apple).

    Now, if the hard drive manufacturers are intentionally limiting supply to create artificial demand, then yes, off with their heads.
     
  8. I get the feeling that customers are paying more, employees are probably getting paid less, or worse, getting laid off....and the CEOs are getting raises and bonuses. That's usually the way this works isn't it?
     
  9. QUOTE:

    "The difference here is that the hard drive manufacturers actually had supply problems, causing demand to rise, whereas Apple never has supply problems (everything is already your fault anyway with Apple).

    Now, if the hard drive manufacturers are intentionally limiting supply to create artificial demand, then yes, off with their heads."

    REPLY:

    they had limited supply problems for short term it was and is still exaggerated, the main concern was logistics but if these companys bothered to invest in those 3rd world countrys infrastructure near their factorys and roads they wouldnt have this issue and we all know those areas are prone to floods due to bad drainage among lack of infrastructure it is a socio economic policy that is lacking while they milkt he workers for $4 an hour or less they then milk consumers and want us to feel sorry for their offshore manufacturing.

    If I was a shareholder I would ask why they invested in such an area thatw as prone to these issues with flooding and had no roadmap to deal with it except to inflate prices.

    As for ironic yeh it is but it works, simple fact is second hand HDD's are or ahve been looking good for the last 14 months, and not off ebay their is tonnes of them to be grabbed 10x cheaper through PC markets etc.
     
    captainawesome likes this.
  10. Ranger1st

    Ranger1st TS Enthusiast Posts: 268   +77

    they took a page from the oil companies; something going on in the mid east? a spill or a fire in the MASSIVE supply line somewhere, create the hysteria of shortage and reap the rewards.. sound familiar.
     
  11. Matthew

    Matthew TechSpot Staff Posts: 6,074   +84 Staff Member

    I'm no expert here, but unless I'm missing something, the report speaks purely of increased revenue and not of net profit. The companies would have to pull in more cash if they want to offset expenses related to the disaster(s). In addition to repairing their own facilities, I believe hard drive manufacturers have also loaned suppliers money to get their factories running again. Just saying, iSuppli doesn't paint a very full picture and the report seems like an attempt to stoke the predictable knee-jerk reaction of "omg, those greedy companies are laughing all the way to the bank..." when that isn't necessarily true.
     
     
  12. Rick

    Rick TechSpot Staff Posts: 6,305   +52 Staff Member

    Ditto. Revenue is NOT equal to profit.
     
  13. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 2,120   +723

    Big thanks to Matthew and Rick for the common sense... That was quite a depressing streak of accusations going there. :)

    From yahoo finance... Seagate (the world's largest manufacturer of HDs as stated in the story) saw revenue increase in Q1 2012 by $1.2 billion over Q4 2011. that's a big jump. Their cost to produce that revenue went up by $700 million. The difference is probably a result of higher prices helping them out. Their profit went up by about $600 million between Dec 2011 and March 2012 as well.
    So it does look like the prices are helping out the manufacturers. But as Wagn8r correctly says above... that's econ 101... if the price is too high for you, don't buy it.
     
  14. Actually, what are our alternatives? If you don't store your data on the devices that are made by the companies that fully occupy the data storage market, then what do we use? Experimental devices do not interface well with the specifications of design wrought by the establishment. The same establishment that creates the systems we are inherently "dependent" on.
     
  15. killeriii

    killeriii TS Enthusiast Posts: 213   +14

    "The research firm concluded that prices will remain inflated until at least 2014"

    I just picked up a 3TB Seagate drive for $145.
    How is that inflated?
    I also got a 128GB SSD for $175.
     
  16. PC nerd

    PC nerd TS Booster Posts: 326   +38


    Try buying a hard drive in Britain...

    1TB - £70/$108
    2TB - £85/$132
    3TB - £115/$178

    I know it's our shitty import taxes which push the prices up, but I need a rant, because I can't afford a hard drive to replace my Samsung F3. I'm stuck with a crap Maxtor 250GB which I scavenged from an old computer.
     
  17. No competition plane and simple. There are only two hard drive manufactures now and the consumer his being extorted.
     
  18. And you think their profit margin is less now than it was before the flooding?
    On what basis do you make this assumption?
     
  19. "No competition plane and simple. There are only two hard drive manufactures now and the consumer his being extorted."

    +1, no one else has caught this. HD companies have been merging like banks and telcoms over the last several years while some got out of the business altogether. And since so many are doing it with their manufacturing operations located overseas, no one has complained. It is now a monopoly, legal and all.
     
  20. PinothyJ

    PinothyJ TS Enthusiast Posts: 429   +15

    How many BILLION did they spend rebuilding, not only their factories but the infrastructure and communities that depend on them? How about you pull your head out of your arse before you make another embarrassing comment like the one you just did.

    Ignorant hack...
     
  21. The love of money is the root of all evil - plain and simple.

    The rich will ALWAYS screw other people, rich being the oil industry, hard drive manufacturers or whatever.

    Those turds from Hollywood may also have a finger in the pie as they don't want people buying huge drives to store their counterfeit digital media.
     
  22. PinothyJ

    PinothyJ TS Enthusiast Posts: 429   +15

    Either you show some proof or accept you have no idea what you are talking about: your choice....
     
  23. These inflated prices need to be investigated by some the EU or some commission as the prices should now have stabilized. Some say that the prices should only have been inflated by 28-30 % but I have seen many an occasion where suppliers have inflated to 100-200 %. Someone is making a buck and we the consumer are definitely being taken for a ride. Someone needs to do something now and fine Seagate and WDC for these high prices due to monopoly .
     
  24. ...some commission.....Some say....should have....have seen many (name two!).....Someone is.....Someone needs........ ...some might say the lack of precision is because you know the square root of sod all about any of it!
     
  25. cliffordcooley

    cliffordcooley TechSpot Paladin Posts: 6,091   +1,519

    Is there an interpreter around to make sense of this, especially the text in bold?
     


Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.