
Is this a time
to invest in cloud storage firms ? We need a "ker ching" icon, methinks
Price comparison site Idealo.co.uk has revealed that disk drive prices were rising by more than 5 per cent a day in the aftermath of the crisis in Thailand that sent supply chains into a tailspin. The worst flooding in the country for more than half a century led to panic buying in the channel and subsequent accusations that …
1. Allow prices to rise to reduce less urgent demand, and to maximise the supply from non flooded sources of supply (overtime all round!).
2. Introduce price controls, which will cause shortages and leave urgent demand unfulfilled with expensive consequences and cause supply to be even more curtailed than it is.
I vote 1.
In this case you might be right.
In general though, people defending so-called economics-101 rules like "the market will sort it", "regulations wreak havoc", "business is business" (translation: "ethics don't matter") have the same simplistic view of the world as those corporations ruining said world with their shortsightedness.
Free Market works, but only when regulated. Unless the goal is to maximise profits while breaking the economy. Enron 101.
In October one distributor staff member told me they were hiking prices by 50% to offset the losses they anticipated to run into January 2012 from lack of stock.
Ironically hard disks are only part of their business, but I do wonder just how quick they'll lower the prices in 2012 when the supply chain is back to normal?
I find it funny how one of our local shop put the price of hard drives up the same day the news came out about the floods, How the hell can you charge twice as much for something you already had in stick and got for a cheaper price that it would cost at the moment, No wounder this world is so fked up..
"How the hell can you charge twice as much for something you already had in stick and got for a cheaper price that it would cost at the moment"
Because if it sells today, they'll want to replenish their stock so they can sell another tomorrow. Given the price rises, that replacement stock will cost rather more than what they bought the original for. If they can't sell another tomorrow, they'll not only lose the margin they could have made, but maybe also other trade as well if the customer goes elsewhere.
There is really no reason for consumer grade drives to be this expensive. The elasticity of demand just isn't there. The fellow that mentioned "gas stations" hit the nail right on the head. This is a luxury device for digital pack rats. I suspect that the market will ultimately not bear these prices.
Unless you have a drive failing right now and don't have a spare, you can probably wait this out.
I suspect this is just a speculative bubble based on some panic buying and a lot of wishful thinking.
Time will tell...
It's easy to understand why the price went up of *existing* stock, because there is no distinction between the HD in the shop, and the HD further up the supply chain. Hell, the value of *your* HD went up too. It's not that there is some magically expensive hard disk further up the supply chain and is waiting to be conveyer-belted along the chain.
By value, I'm talking about "what the market is willing to pay for it", not "what the retailer bought it for". In many instances, the retailer doesn't even "buy" the stock to sell to you, see Sale or Return for an example, and quite probably iPads in authorised resellers (if the Apple NDA allowed us to find out).
In fact if the supply chain as a whole didn't increase its value, it would get even more complicated, as different shops would have vastly different prices depending on when/where in the chain they are.
With all the talk about shortages I was surprised yesterday to walk into the local Walmart and find 1.5 TB external drives for $109, way cheaper than internal ones in dedicated computer stores, where you can find them for $150 and more.
I think the end users don't care so much about these shortages. The prices for computers did not go up (yet), so who is affected, the geeks like me who build their own PCs. A pretty small market.
* around here = Toronto Canada.
"The simple laws of economics – supply and demand – dictate that prices will rise in times of scarcity but clearly some resellers need to convince customers that movements are legit."
In other words, if prices rise too much, then customers won't buy. So much, so expected.
"Others will profiteer and sadly tarnish the channel."
Wrong! That's politican's muddy thinking. You got feet, so you can vote. You see the prices and you make your choices. Or keep running those 7'200 RPM 200GB ATAs for while longer.
The real gold rush for smart buyers/decision makers? Why buy from dodgy , flood prone manufacturers in 3rd world countries? You too can speed ahead and beyond the curve. Whoops, why has the SSD advert on the reg stopped claiming 1,000,000 IOPS all of a sudden. Sounds like capitaism to me.
@Raz, you may find that Walmart is one of those stores that just updates prices on certain products monthly or quarterly, and have not jacked the prices up yet.
Anyway... profiteering? The fact of the matter is production is WAY down (something like 60% reduction), production will be well below demand for quite a while. This means higher prices. There may have been "a little" profiteering in terms of marking up prices at retail on existing stock, but it cost them more to replenish that stock than they initially had these drives priced at, and no-one wants to lose money in a volatile market, so they tend to err a little on the other side.
About 3 months ago I got a ProLiant MicroServer with 2x2Tb discs and a few other bits for about £380. Just the discs cost more than that now.
The annoying thing is I could do with another 2Tb drive, to make a 3 drive array. Maybe I should sell the two I've got and buy 4Tb+ drives for the same money in a 6 months time when sanity is restored.
I had an order for 2TB WD drives in the works with Misco when the floods occurred. The drives were in stock when I placed the order and delivery is usually next day. After 5 days I enquired where they were and was told the order had been mysteriously cancelled. Misco could not explain the cancellation at all but said I could re-order them. And, you guessed it, the price was now nearly double for exactly the same part number.
As WD drives are currently not being manufactured then these drives were either in stock or were in-transit at the time of the flood. The date codes were also pre-flood. Rip off, absolute rip-off!
http://www.channelregister.co.uk/Design/graphics/icons/comment/unhappy_32.png
We're a small PC builder - sold my stock of hard drives at the usual price. We also build PCs - refusing to buy hard drives now as it would make our machines uncompetitive - where are the big manufacturers getting their stocks? So we're not building at present - how many other small IT guys are doing the same - perhaps never to return to the industry. Maybe the PC is truly dead after all. We barely made money as it is. I doubt if we will resume building unless prices come down to pre-flood levels.