HDD industry seeks to reset pricing

Before the Thai floods wreaked havoc on the HDD supply chain, price wars in the storage market resulted in $100 price tags for disks with a capacity of 2TB. After the disaster prices skyrocketed, currently pricing is coming down again but according to John Rydning, research vice president of HDDs at market research firm IDC, manufacturers are unlikely to drop prices to pre-disaster levels:

At the same time, the laws of supply and demand caused HDD prices to double and even triple, depending on the HDD model. However, the HDD market is now starting to rebound with year-over-year unit shipment growth of 7.7% in 2012 and a compound annual growth rate (CAGR) of 9.6% for the 2011-2016 forecast period, which sounds very healthy. So, will this result in HDD prices sinking to their pre-disaster levels? Apparently not, as it looks like the industry (composed now of just two players) looks to "reset" pricing to somewhere in the middle of the two extremes, as John Rydning research vice president, Hard Disk Drives at IDC explained, "In many respects, the hard disk drive industry has collectively hit the 'reset' button. A reset of the HDD industry structure should allow for the remaining HDD industry participants to slowly reduce HDD prices from current levels at a rate that still delivers value to customers, while at the same time ensuring sufficient funding is available to develop new HDD technologies that are needed to improve HDD capacity, performance, reliability, power consumption, and security." One can see duopoly price-fixing lawsuits waiting in the wings...

Source: Legit Reviews