Feeds

HDD oligopoly to keep post-flood prices high till 2014

Surging demand and vendor lock-in delays return to 2011

Choosing a cloud hosting partner with confidence

Hard disk drive prices are unlikely to return to pre-flood levels until 2014 despite rising production levels, thanks to surging demand, vendor lock-in and a market dominated by just two suppliers, according to analysts.

IHS iSuppli’s latest Memory & Storage Market Brief report revealed that the average selling price (ASP) for the entire HDD market rose 28 per cent, from $51 (£33) in Q3 2011 to $66 (£42) in the fourth quarter.

However, with the floods now a distant memory, production has been getting back on track and will recover completely by the third quarter 2012, the report said.

Shipments are expected to rise by 10 per cent from the previous quarter to 176 million – the first time this year they will have exceeded 2011 levels – but average selling prices will remain little changed, according to the analyst.

Storage systems analyst Fang Zhang said part of the reason for the continued high prices is the current concentration of market share.

“With the two mega-mergers between Seagate/Samsung and Western Digital/Hitachi GST, the two top suppliers held 85 per cent of HDD market share in the first quarter 2012,” he said.

“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.”

A related factor is that an increasing number of OEMs have signed up to long term contracts with said HDD makers, in order to obtain guarantees on shipments. These deals effectively lock them in to prices around 20 per cent higher than pre-flood levels, said iSuppli.

Finally, demand for HDDs continues to soar, inflating prices.

Demand is mainly driven by corporate and consumer-related cloud storage and is predicted to continue later in the year thanks to a surge in PC sales on the back of the launch of Windows 8 and Ivy Bridge Ultrabooks. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
'Kim Kardashian snaps naked selfies with a BLACKBERRY'. *Twitterati gasps*
More alleged private, nude celeb pics appear online
Wanna keep your data for 1,000 YEARS? No? Hard luck, HDS wants you to anyway
Combine Blu-ray and M-DISC and you get this monster
US boffins demo 'twisted radio' mux
OAM takes wireless signals to 32 Gbps
Google+ GOING, GOING ... ? Newbie Gmailers no longer forced into mandatory ID slurp
Mountain View distances itself from lame 'network thingy'
Apple flops out 2FA for iCloud in bid to stop future nude selfie leaks
Millions of 4chan users howl with laughter as Cupertino slams stable door
Students playing with impressive racks? Yes, it's cluster comp time
The most comprehensive coverage the world has ever seen. Ever
Run little spreadsheet, run! IBM's Watson is coming to gobble you up
Big Blue's big super's big appetite for big data in big clouds for big analytics
Seagate's triple-headed Cerberus could SAVE the DISK WORLD
... and possibly bring us even more HAMR time. Yay!
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.