What is going on with HDD prices ?!?!?!

[TreeTops]

Deadrats are you a commie?

[jagabo]

in all honesty who cares?

I care! I was waiting for 3TB drives to drop below US$100. They got as low as $109 (at Fry's) a month ago. I figured Black Friday and Christmas sales would get them down a bit more. Now I'll have to wait several months.

I suspect there will be a glut of other parts as people put off building new systems. That should lead to sales on CPUs, motherboards, graphics cards, etc.

[edDV]

When a 2TB WD HDD went from $134.99 to $249.99, I'd say they are already beyond "out of control"!!!!
LOL!!!

And no, they won't be out of control for the next 2 years, but when they double and triple, even for 6 months, it's a bad thing!!!

the immediate price hikes are nothing more than a combination of a knee jerk reaction and good old "free market"* business practices i.e. excuses to price gouge.
....
*i would like to point out that "free market" is an insider term for "free to screw your fellow man every chance you get and if they complain denounce them as a pinko".

My best guess what is happening behind the scenes is all the major hard drive users such as

Google
PC manufacturers (HP, Dell, Apple, etc.)
Other server farms
Big retail chains
Various governments

all got in to secure their supply with large contracts. That left a small supply for the one at a time aftermarket so those prices (e.g. Newegg, Tiger) went to the roof.

[El Heggunte]

Deadrats are you a commie?

I suppose he just knows the difference between "beautiful speeches" and "actual behaviors"

[deadrats]

Deadrats are you a commie?

the full and complete answer to that question would take us in directions that violate this forum's rules against discussing politics and religion.

there is no rule against discussing my personal life and i can share with you that i am in the middle of writing a book on economics which has the working title of "Jesus was a communist".

and i am a firm believer in the philosophy that just because you can do something doesn't mean that you should do it or that it's right.

[p_l]

"Jesus was a communist".

Wow, with one brief sentence you manage to bat .666 against the AUP.

No Political, Religious, or War related discussions

[jagabo]

Seagate is predicting hard drive production won't return to normal for a year:
http://www.tomshardware.com/news/Seagate-HD-Stephen-Luczo-Toshiba-Western-Digital,14039.html

[dragonkeeper]

Seagate is predicting hard drive production won't return to normal for a year:
http://www.tomshardware.com/news/Seagate-HD-Stephen-Luczo-Toshiba-Western-Digital,14039.html

Exactly what i figured would happen, it may be 18 months or more before prices return to what they once were. Hard drive manufactures are gonna milk this cow for all its worth. It really sucks a big one, Guess they would be crazy not to.

I only have enough free space to last me about 6 months, if I'm conservative. After that I'll have to start putting files on some of my older smaller drives that are collecting dust.

[zoobie]

I was under the impression that industries were always on the lookout for excuses to raise prices far above and beyond what any real damage may or even may not have occured...

[El Heggunte]

Seagate is predicting hard drive production won't return to normal for a year:
http://www.tomshardware.com/news/Seagate-HD-Stephen-Luczo-Toshiba-Western-Digital,14039.html

Often the word "prediction" actually stands for:

a) expectations

b) *manipulation*

[fritzi93]

This all prompted me to have a look at SSDs. Nope, price per GB is ~$1 minimum for the lower-end SSDs, so it will probably be a long time yet before they're a sensible choice for storage.

Nevertheless, I got two, a 60 GB OCZ Agility 3 for the office computer, and a 96 GB OCZ Vertex 2 for my HTPC/Video editing-encoding machine. They replaced the 160 GB and the 250 GB boot drives in the two computers, respectively. Had to move most largish document folders to storage drives, of course. So I gained a little space, but I'll wait awhile before using the spare drives for storage, for obvious reasons.

It's been a truism that adding RAM would give one the best performance boost of any single thing you could upgrade (for the money). I have to say that going to an SSD boot drive beats hell out of that.

Anyway, I got the Agility for $65 bucks (after $25 rebate) from Newegg and the Vertex for $100 from MyDigitalDiscount. I noticed today that the Agility 3 60 GB drive is priced now at $107 bucks at Newegg. Maybe others were stimulated to look at SSDs, as I was.

Oh, BTW, the Seagate 2 TB green drive I got benches quite well, which was a nice surprise. Performance is better than I expected, essentially on a par with my 7200 rpm hard drives.

[deadrats]

I was under the impression that industries were always on the lookout for excuses to raise prices far above and beyond what any real damage may or even may not have occured...

that is a very astute impression to be under; in the case of the floods in asia all those factories are insured and there are ample hard drives in the supply chain to last until the factories get up and running again.

what's causing the immediate price increase is that retailers tend to price the items they sell not by how much they paid for them but rather the replacement cost, how much it will cost to restock the depleted inventory. so the retailers are assuming that there's going to be a shortage of hard drives and are expecting distributors to price gouge so they price gouge in advance to make sure they have enough cash to be able to restock.

of course there is no reason why a shortage of inventory should result in higher prices other than the fact that there is some douche that is always looking for an excuse to charge more and increase his profit margins, not caring that while he fattens up his bank account in the short term, long term he is really contributing to devaluing the dollar and resulting in an overall inflationary effect on the economy.

[TBoneit]

This all prompted me to have a look at SSDs. Nope, price per GB is ~$1 minimum for the lower-end SSDs, so it will probably be a long time yet before they're a sensible choice for storage.

Nevertheless, I got two, a 60 GB OCZ Agility 3 for the office computer, and a 96 GB OCZ Vertex 2 for my HTPC/Video editing-encoding machine. They replaced the 160 GB and the 250 GB boot drives in the two computers, respectively. Had to move most largish document folders to storage drives, of course. So I gained a little space, but I'll wait awhile before using the spare drives for storage, for obvious reasons.

It's been a truism that adding RAM would give one the best performance boost of any single thing you could upgrade (for the money). I have to say that going to an SSD boot drive beats hell out of that.

Anyway, I got the Agility for $65 bucks (after $25 rebate) from Newegg and the Vertex for $100 from MyDigitalDiscount. I noticed today that the Agility 3 60 GB drive is priced now at $107 bucks at Newegg. Maybe others were stimulated to look at SSDs, as I was.

Oh, BTW, the Seagate 2 TB green drive I got benches quite well, which was a nice surprise. Performance is better than I expected, essentially on a par with my 7200 rpm hard drives.

Being so fast a SSD does give a big performance boost.

With those OCZ drives you bought you should look into upgrading the firmware. If they use the Sandforce 2xxx controller they have supposedly released a firmware update that fixes many of the problems some users have been having. Some never a problem and others some major problems. It seems to be tied to specific hardware somehow.

Seagate is predicting hard drive production won't return to normal for a year:
http://www.tomshardware.com/news/Seagate-HD-Stephen-Luczo-Toshiba-Western-Digital,14039.html

Exactly what i figured would happen, it may be 18 months or more before prices return to what they once were. Hard drive manufactures are gonna milk this cow for all its worth. It really sucks a big one, Guess they would be crazy not to.

I only have enough free space to last me about 6 months, if I'm conservative. After that I'll have to start putting files on some of my older smaller drives that are collecting dust.

How about BluRay for storage? I have 6 S/L discs worth of material organized and ready to burn (archive) which will free up approx 130Gb of space. Cost around $12 for the Verbatim blanks I bought a little while ago.

I'm sure the drive makers costs are going up too. If you want to make drives you are going to be competing with the other makers for the remaining parts available due to production losses of those parts in Thailand.

[TBoneit]

I was under the impression that industries were always on the lookout for excuses to raise prices far above and beyond what any real damage may or even may not have occured...

that is a very astute impression to be under; in the case of the floods in asia all those factories are insured and there are ample hard drives in the supply chain to last until the factories get up and running again.

what's causing the immediate price increase is that retailers tend to price the items they sell not by how much they paid for them but rather the replacement cost, how much it will cost to restock the depleted inventory. so the retailers are assuming that there's going to be a shortage of hard drives and are expecting distributors to price gouge so they price gouge in advance to make sure they have enough cash to be able to restock.

of course there is no reason why a shortage of inventory should result in higher prices other than the fact that there is some douche that is always looking for an excuse to charge more and increase his profit margins, not caring that while he fattens up his bank account in the short term, long term he is really contributing to devaluing the dollar and resulting in an overall inflationary effect on the economy.

What about the law of supply and demand. It looks as if drive production will be down 40%. Until the price rises to the point that demand lowers so that supply equals demand how would you handle the shortage?

Sell at the old price to manufacturers only and no sale to others?

I expect this shortage to slow the economy globally. Hard drives go in other things beyond computers. DVRs for example. A growing market. I have three DVD recorders in the house with hard drives in them as well as two DVRs and computers.

Imagine I am the CEO of Seagate for example and I decide to retain the old price structure when all the other makers raise their prices. I'll be out the door so fast and my replacement will raise prices to due to the demand.

Want lower prices? Don't buy anything with a hard drive in it.

I expect computer prices to rise. That may help me move my older used computers.

[fritzi93]

Being so fast a SSD does give a big performance boost.

With those OCZ drives you bought you should look into upgrading the firmware. If they use the Sandforce 2xxx controller they have supposedly released a firmware update that fixes many of the problems some users have been having. Some never a problem and others some major problems. It seems to be tied to specific hardware somehow.

Yeah, the Agility3 came with latest firmware (v2.15) which supposedly resolves all previous controller issues.

The Vertex2, OTOH, came with v1.6 firmware (latest is v1.7). The linux bootable updater (available at the OCZ website) doesn't recognize my drive. The alternative is to jumper the drive and use the destructive updater off a bootable floppy. Which I wouldn't mind doing, except I don't have a floppy drive in my computer, and none of my flash drives can be made bootable with the suggested method (the old HP bootable floppy method).

Dunno if I'm gonna fool with that any more, since the drive is working okay with the present firmware.

I suspect some of the bitching and negative reviews of the OCZ drives are because of the amateurish way they have dealt with firmware updates. Because, of course, the controller and its firmware are of central importance to an SSD's performance. Then there's user error naturally, since reading between the lines, it's mostly noobs having trouble with installing their SSD's.

How about BluRay for storage? I have 6 S/L discs worth of material organized and ready to burn (archive) which will free up approx 130Gb of space. Cost around $12 for the Verbatim blanks I bought a little while ago.

That's a good suggestion. Instead of backing up documents to separate internal drives in the computer, I've moved the backups to BDRs.

[TBoneit]

Glad you are on top of it with the firmware.

When I was looking into SSDs this past spring OCZ was not a contender for my money.

I went Intel 320 series (now with the updated firmware) Samsung and Kingston based on user reviews. My brother loves the I7 i built him with a SSD boot drive.

[deadrats]

What about the law of supply and demand. It looks as if drive production will be down 40%. Until the price rises to the point that demand lowers so that supply equals demand how would you handle the shortage?

"supply and demand" is one of the most overused, misused and abused terms in the english language.

demand is independent of supply, an increase or decrease in the supply of a good or service doesn't automatically cause the amount demanded to increase or decrease.

let's assume that hard drive supply went to 0 for the next year, would you suddenly be overcome with the urge to buy a hard drive you otherwise wouldn't have wanted? if ford went out of business tomorrow and you could no longer buy a taurus would you suddenly go looking in the secondary market for a car that you never would have considered looking at?

if the hard drive manufactures were smart what they would do is lower the price of all existing inventories in order to liquidate their stocks of hard drive and thus increase the amount of capital on hand; that would increase investor confidence, allowing them to lower their debt, increasing their ability to get short term loans that would allow them to recover faster.

price gouging is going to have the opposite effect, cooling demand, reduce their liquidity and make the recovery process take longer.

[dragonkeeper]

What about the law of supply and demand. It looks as if drive production will be down 40%. Until the price rises to the point that demand lowers so that supply equals demand how would you handle the shortage?

"supply and demand" is one of the most overused, misused and abused terms in the english language.

demand is independent of supply, an increase or decrease in the supply of a good or service doesn't automatically cause the amount demanded to increase or decrease.

price gouging is going to have the opposite effect, cooling demand, reduce their liquidity and make the recovery process take longer.

I agree with deadrats, the sudden jump in hard drive prices has caused my company to pretty much cut spending in the IT department all together. We are maintaining what we currently have, only buying what we absolutely need. Plans to migrate the company to windows 7 have been put on hold, and by migrate i mean purchase new systems with Windows 7 installed. last i looked that was about 25,000 laptops alone, multiply that by a minimum of 20 for desktop units. I reasonably sure other retailers will follow suite companies like Blackbox, NCR, Compucom, Wachter maybe hurting until this mess clears up.

[TBoneit]

What about the law of supply and demand. It looks as if drive production will be down 40%. Until the price rises to the point that demand lowers so that supply equals demand how would you handle the shortage?

"supply and demand" is one of the most overused, misused and abused terms in the english language.

demand is independent of supply, an increase or decrease in the supply of a good or service doesn't automatically cause the amount demanded to increase or decrease.

let's assume that hard drive supply went to 0 for the next year, would you suddenly be overcome with the urge to buy a hard drive you otherwise wouldn't have wanted? if ford went out of business tomorrow and you could no longer buy a taurus would you suddenly go looking in the secondary market for a car that you never would have considered looking at?

if the hard drive manufactures were smart what they would do is lower the price of all existing inventories in order to liquidate their stocks of hard drive and thus increase the amount of capital on hand; that would increase investor confidence, allowing them to lower their debt, increasing their ability to get short term loans that would allow them to recover faster.

price gouging is going to have the opposite effect, cooling demand, reduce their liquidity and make the recovery process take longer.

Demand is independent of supply, But it isn't independent of price. If demand exceeds supply then the price will rise until they are in equilibrium.

A. I do not consider it price gouging, Different interpretation.
B. The raised prices that have lowered demand are a perfect example of Supply & Demand at work.
C. Since they are able to sell all they can produce due to the lowered production levels due to the flooding, How is this lowering their liquidity?

Lowering prices would hurt liquidity since production is down their net profit would be down.
Example: If I sold 10,000 a day at $10 making $1 per unit I would net $10,000. Now Due to the flooding I can only make 5,000 units and I still make $1 per unit I just cut my net profit in half. How is this helping me.

If they lowered prices the production runs would go to the big buyers. IE Dell, HP/Compaq, Lenovo, Acer and not to the little guy computer shops or Websites. With prices raised (law of Supply & demand again)

Lest you think I work for the manufacturers, I do not. I work in a computer store and I see business dropping due to the rise in hard drive prices. That will impact computer repairs. Once I'm sold out of drives Big Boss wants to wait for prices to return to previous levels.

I agree with deadrats, the sudden jump in hard drive prices has caused my company to pretty much cut spending in the IT department all together. We are maintaining what we currently have, only buying what we absolutely need. Plans to migrate the company to windows 7 have been put on hold, and by migrate i mean purchase new systems with Windows 7 installed. last i looked that was about 25,000 laptops alone, multiply that by a minimum of 20 for desktop units. I reasonably sure other retailers will follow suite companies like Blackbox, NCR, Compucom, Wachter maybe hurting until this mess clears up.

Once again the rise in price has reduced demand.

Any economists care to jump in?

[magillagorilla]

ug, this is bad timing. I just ran out of HDD space. Go ahead miniDV and HDV users, laugh it up at the flash memory camcorder folks. Just before the holidays too, when I shoot a lot of family footage.

I also buy my HDDs in pairs, 1 live and 1 backup. That is not going to happen for a while. I refuse to pay $140 for 1TB.

The way I found out about the shortage was after I purchased every part I needed for a new HTPC except the HDD. I went to Microcenter to get a drive and went "WTF"! My brand new HTPC is rokkin a Gigabyte mini ITX with 3Ghz Core i3, 4GB RAM, USB3, a silent Zotac nVidia 210 card with 1GB DDR3 and ...... a 40GB HDD hahaha! They had 40GB SATA drives for $7. Next drive up was a WD green 500GB for $89, no thanks.

[TreeTops]

Gorilla..You said "I refuse to pay $140 for 1TB"

I had to laugh when I read that. I remember paying 500 bucks for a 40 gig drive years ago. And almost that much for a floppy drive for my Commadore 64. Don't remember how much those floppy's held, but it wasn't much. How times have changed.

[TBoneit]

I paid about $400 or so for a 20Megabyte hard drive. I paid close to $1000 for a 1 Gigabyte drive when they first came out. Even at these raised up prices the drives are a good buy.

[jagabo]

I paid about $400 or so for a 20Megabyte hard drive. I paid close to $1000 for a 1 Gigabyte drive when they first came out. Even at these raised up prices the drives are a good buy.

I paid about the same for those sizes when they were big drives. But 2TB drives were selling for less than US$100 before the recent problems. 3TB for as low as US$110.

[deadrats]

Demand is independent of supply, But it isn't independent of price. If demand exceeds supply then the price will rise until they are in equilibrium.

first things first, demand is not only independent of supply but depending on the type of good or service demand can be or can not be independent of price.

if a good or service is "elastic" it's demand will be dependent on price, if a good or service is "inelastic" it's demand will not be effected by it's price. in reality most goods and services are a hybrid of elastic and inelastic, acting as one or the other up to a point and then switching; gas and cigarettes are two classic examples of an inelastic good who's demand is independent of price, but as has been shown there is a tipping point at which they switch and become elastic.

A. I do not consider it price gouging, Different interpretation.

i don't see how it's a "different interpretation", if a business raises it's prices to cover it's increased operating costs, that i can understand but when they engage in "profiteering" (which by the way is illegal in some circumstances and countries) in order to exploit a perceived crisis in order to fatten their wallets as much as possible that is flat out wrong.

consider this: the united states gross domestic product is 14.582 trillion dollars (the total value of all the goods and service produced in this country), there is currently about 880 billion dollars in currency (federal reserve notes and currency no longer being issued) and of that about 75% of it is held outside the u.s.

as you can see there is a finite amount of money to go around, when someone raises the prices arbitrarily the money has to come from someone's pocket; the economy is a zero sum game, in order for you to win someone else must lose; when one party wins big someone else has to lose big.

B. The raised prices that have lowered demand are a perfect example of Supply & Demand at work.

raised prices that lower demand is not an example of supply and demand, it's an example of an elastic good.

C. Since they are able to sell all they can produce due to the lowered production levels due to the flooding, How is this lowering their liquidity?

i don't believe that they are selling all the can, these companies always produce more than they can sell so that have plenty of stocks on hand to meet market demands, as do distributors; there are ample supplies in the distribution chain that were produce prior to the floods.

what the increased prices are doing is cooling demand substantially, which means inventory isn't getting sold reducing their incomes, this at a time when they need as much income as they can get their hands on; that's why i say that they should drop the prices drastically to liquidate all their inventories and have strong cash reserves.

Lowering prices would hurt liquidity since production is down their net profit would be down.
Example: If I sold 10,000 a day at $10 making $1 per unit I would net $10,000. Now Due to the flooding I can only make 5,000 units and I still make $1 per unit I just cut my net profit in half. How is this helping me.

you're assuming that they operate a business model akin to a diner, where food is made to order, they don't. they operate like a dunkin donuts where they make x amount of donuts a day and hope that they sell them, same with a bagel shop, they make what they think they can sell for the day and hope that they don't have left overs or shortages.

computer parts manufactures just start the machines and keep making parts, the parts don't spoil, they just keep cranking them out and just wait until they sell them, that's why you can still find penryn based cpu's and supporting motherboards or ddr2 in the supply chain, or why you can still find small 320gb hard drives and they're priced as much as a 750gb drive, they were made years ago and stayed in the supply chain, it's old inventory.

there's loads of 1 and 1.5 tb hdd just laying around, which will now not be sold due to the price gouging.

they should be dropping prices through the floor so that they can move all the old stock and convert it to cash as they had originally planned when they made the drives in the first place.

[edDV]

Demand is independent of supply, But it isn't independent of price. If demand exceeds supply then the price will rise until they are in equilibrium.

first things first, demand is not only independent of supply but depending on the type of good or service demand can be or can not be independent of price.

if a good or service is "elastic" it's demand will be dependent on price, if a good or service is "inelastic" it's demand will not be effected by it's price. in reality most goods and services are a hybrid of elastic and inelastic, acting as one or the other up to a point and then switching; gas and cigarettes are two classic examples of an inelastic good who's demand is independent of price, but as has been shown there is a tipping point at which they switch and become elastic.

A disturbance in anticipated supply can cause demand to rise and be inelastic in the short term.

Many of us here had delayed purchase of hard drives in anticipation of lower prices on Black Friday. When word spread of the Thailand flood affecting future drive supply a reasonable person would anticipate higher prices in the near future.

I acted immediately and paid $10ea more to secure 2x 2TB drives to cover my medium term needs. I expect others did the same. The combination of increased short term demand and questionable future supply lead both distributors and retailers to quickly raise prices.

They do this not just to gouge, but to adjust prices to the short term demand. It is in the retailer's interest to avoid empty shelves. Better to have some stock at higher prices than to lose a customer.

Meanwhile the large consumers of hard drives (e.g. Google and PC makers) rushed to secure their supply and were willing to bid prices high to keep their business viable. This pushed wholesale prices up for distributors. If prices didn't go up through orderly negotiation, you would have had a "run on the bank" to grab supply. The prices will stay high so long as supply is restricted. It will balance. Hard disk users will limit purchases while prices are high.

[TreeTops]

Best Buy black Friday hard Drive deal.

However, on my last visit to Best Buy a couple of days ago, I saw very few drives on the shelf. Maybe these were in the back room?

[TBoneit]

Demand is independent of supply, But it isn't independent of price. If demand exceeds supply then the price will rise until they are in equilibrium.

first things first, demand is not only independent of supply but depending on the type of good or service demand can be or can not be independent of price.

if a good or service is "elastic" it's demand will be dependent on price, if a good or service is "inelastic" it's demand will not be effected by it's price. in reality most goods and services are a hybrid of elastic and inelastic, acting as one or the other up to a point and then switching; gas and cigarettes are two classic examples of an inelastic good who's demand is independent of price, but as has been shown there is a tipping point at which they switch and become elastic.

A disturbance in anticipated supply can cause demand to rise and be inelastic in the short term.

Many of us here had delayed purchase of hard drives in anticipation of lower prices on Black Friday. When word spread of the Thailand flood affecting future drive supply a reasonable person would anticipate higher prices in the near future.

I acted immediately and paid $10ea more to secure 2x 2TB drives to cover my medium term needs. I expect others did the same. The combination of increased short term demand and questionable future supply lead both distributors and retailers to quickly raise prices.

They do this not just to gouge, but to adjust prices to the short term demand. It is in the retailer's interest to avoid empty shelves. Better to have some stock at higher prices than to lose a customer.

Meanwhile the large consumers of hard drives (e.g. Google and PC makers) rushed to secure their supply and were willing to bid prices high to keep their business viable. This pushed wholesale prices up for distributors. If prices didn't go up through orderly negotiation, you would have had a "run on the bank" to grab supply. The prices will stay high so long as supply is restricted. It will balance. Hard disk users will limit purchases while prices are high.

Ed: A very clear and concise explanation.

I had someone in today that wanted a 320Gb laptop 7200 RPM drive with 16Mb cache. Best Buy had them at $99 for WDC. Only problem was the nearest was two states away./
He wants to think about it since I have Seagates. My translation of that is he is going to search the Internet for a better buy. I wish him luck since if it were up to me I'd hold onto them to use in repairs where we make more money from the labor charge.

3TB USB3 for $99 is a good price if you can score one. Myself I can't be bothered to get up in the middle of the night to hopefully get something like that. Maybe for the 42" LCD HDTV for $199.99 I might be slightly tempted.

[TBoneit]

[Attachment 9751 - Click to enlarge]

Best Buy black Friday hard Drive deal.

However, on my last visit to Best Buy a couple of days ago, I saw very few drives on the shelf. Maybe these were in the back room?

SInce the advert says minimum of 5 per store I'd bet they are put away until.

[p_l]

Not to beat a dead horse or gloat, but I'm really glad I ordered when the orderin' was good about a month and a half ago, then hitched up, 5TB worth of bargain-priced HDD. Jes' lucky, I reckon'.

[edDV]

Not to beat a dead horse or gloat, but I'm really glad I ordered when the orderin' was good about a month and a half ago, then hitched up, 5TB worth of bargain-priced HDD. Jes' lucky, I reckon'.

Sell them on eBay while prices are high. I bet they sort out supply quickly in 2012 and prices will drop back to normal.