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Hard disk drive makers still spend money to recover their production facilities that were harmed by a flooding back in 2011, but even now average selling prices are gradually returning to their historical levels due to general dynamics of the personal computers market. It remains to be seen whether the ASPs will get back to the “pre-flood” levels, but today’s ASP are on the pre-economic crisis levels.

Based on the recent financial results of Seagate Technologies and Western Digital Corp., average selling price of a hard disk drive in Q3 – Q4 of calendar 2012 (Q1 – Q2 of fiscal 2013) decreased to $62 - $63 per unit, which is considerably higher than $45 - $55 ahead of the flood in Thailand in 2010, but is in line with ASPs between $53 and $62 in Q3 2008 (Q2 FY2009), ahead of a major drop of demand for PCs in the following quarters due to global economic.

Note: Seagate’s ASP for Q2 FY2013 is not official and was obtained based on preliminary financial results the company published earlier this month.

Obviously, just average selling prices of hard disk drives cannot fully describe the market situation by themselves since they are affected by multiple factors, such a product mix, seasonality, product performance and so on. Nonetheless, it is evident that the HDD ASPs peaked in Q4 2011 (Q2 FY2012) and were on the decline trend since then.

At present WD is trying to sustain average selling prices on certain levels and avoid further drops since it will negatively affect its margins and competitive abilities in the long-term. The company’s new chief executive said that it limits production levels in order not to produce excessive inventory and then sell it at low prices. At the same time, Western Digital is looking forward to make its business and products more economically efficient, which should help the company to survive even with soft market demand and low ASPs.

“We obviously have more capacity than what we are producing because we are throttling it to what we see as demand. But we are taking actions to reset our capacity potential to a more appropriate level given what we view the secular changes in terms of the overall demand profile for the industry. Not that we do not expect to see growth, but not at the same rates than what we have historically done. […] There are multiple opportunities that we have as an organization to continue to improve our cost structure,” said Stephen Milligan, chief executive officer of WD.

Tags: Seagate, WD, Western Digital, HDD, Business

Discussion

Comments currently: 8
Discussion started: 01/25/13 02:23:32 PM
Latest comment: 02/11/13 06:01:44 PM
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1. 
Still vaguely pissed off I got a 3 platter 2tb barracuda from seagate instead of the 2 platter one. Deliberately trying to confuse consumers is a crime.
0 1 [Posted by: InsertNameHere  | Date: 01/25/13 02:23:32 PM]
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2. 
Floods my arse. The manufacturers used that as an excuse to rape their customers. I can't wait for SSDs to reach the capacity and prices of their HDD counterparts. Then I'll sit and laugh as "Western Digital", "Seagate" and the rest of the unofficial consortium's sales dwindle into nothing.
2 0 [Posted by: FTL  | Date: 01/25/13 04:07:17 PM]
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- collapse thread

 
Not long ago, the idea that SSDs could compete with magnetic storage was laughable. Unfortunately, now that there are essentially two remaining disk manufacturers, they seem more interested in fixing prices than ramping capacity. So, that future will probably come sooner than expected.

Looking at the graph, it appears that the prices have leveled off, not that they are slowly returning to previous levels. That is only part of the picture though; the other part being capacity, which hasn't improved significantly over the same time period.
1 0 [Posted by: x  | Date: 01/26/13 10:04:06 AM]
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3. 
So they manufacturers are artificially keeping the prices high?

Idiots... they could make the same money by selling more cheaper as they make by selling less more expensive and we could all be happy...
1 1 [Posted by: nitro912gr  | Date: 01/26/13 09:54:04 AM]
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- collapse thread

 
No, they don't. They just don't oversaturate the market with supply. They can't sell more without losing profit. Look at WDC and STX quarter reports. They are selling more HDDs then before floods, but they keep price high enough. And they don't try to compete, because both companies know that even if one gets higher share it won't be beneficial to stockholders.
0 1 [Posted by: PsiAmp  | Date: 01/28/13 05:45:56 PM]
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4. 
Whilst the two manufacturers re-defined greed/ profiteering to a whole new level, the directors were applauded by big business/shareholders for making a quick buck (billions of them) out of a natural disaster/tragedy, and don't forget the distributors and retailers also eagerly taking their cut with shameless price gouging

People used to be locked up/executed for similar behaviour

I wont forget but what options do I have when I need more storage
1 0 [Posted by: alpha0ne  | Date: 01/26/13 09:03:54 PM]
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5. 
Anybody who believes in such Toothfairy Tales are either one of Zer Chosen Few [ZCF], you know, those who were groomed from infancy to believe and act out their superman personnas of which the lack of consience and the manificience of their malevolence are pre-requisites, or they are the, "'Ow wide, pretty please, dahlingss". Economies of Scale and Competition are the commerical equivalents of leveling the playing field, oka Der Kommunism of Das Kapitalists, but when you have 2 Willes waggling out a shared monopoly, benevolence to another is the least of their concerns. Then, the justification of Cleaning Up The Act is something Of Infinity - they not need to clean up anything because they own The Kaboodle.

For prices to drop, you'll either need real competition or clawing back market share - especially when the market is falling. Not when Zer Beancounter's nightmare, "Annual Growth [of Market Share]", is running amok, of course. Seagate's MO is justifying their cheapo-skato-ness whereas WD's MO is ZCF's fav, "Eet's a seekret, jawhol". Especially the areal density and their greeny-looney secrets. These 2 being on different platforms much akin to The Good Cop, Bad Cop Act, Hard Drive prices aren't going to go back to the Good Ole Days, they are going where even Mr Spock has not gone before. Yes, eets guessing time and calling that, "Inside Info". II like, "Hard Drive prices going back to "normal". What planet are people living on, eh? The one which create news and not merely reporting it - especially when The Real News is a word dirtier than any Ole Monopoly could imagine. One reason why "Democratising The Globe" needs Malevolence as its Leader. All Hail Seagate und WD.
1 0 [Posted by: cummulus  | Date: 01/28/13 01:04:24 AM]
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6. 
I work for a data recovery shop and the HDD prices had a direct influence on our business. It's nice to see that things are going back to normal a bit. However, I hope lower prices doesn't mean bad quality. I'm having a lot of WD disks at work lately. From my experience they're not the best..
0 0 [Posted by: chronodisk  | Date: 02/11/13 06:01:44 PM]
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