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Brian

Western Digital Q3 2012 Discussion

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And yet I STILL cannot buy an internal consumer 3.5" 4TB HDD with 1TB platters. Seagate's 1TB platter models stop at 3TB, and Hitachi's 5K4000 model has 5 800GB platters (and hence is no faster than most 2TB HDDs).

Come on, WD, bring on the 1TB platter HDDs!

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What was WD's shipment numbers before the flood? Since Seagate is already operating at normal volumes, the only excuse for the high prices was WD. With WD now meeting demand, prices, in theory, should drop back down to normal levels. Last I checked, the 3TB drive I want more of is still double the price it was when I bought some late last summer. I have yet to buy a HDD post flood and I will continue to do so till prices drop back down to normal.

Johnw42: I agree on the lack of 4TB drives using 1TB platters. Innovation has really slowed down in the HDD industry in the last year or so. 1TB platter have been out for almost a year now. I won't be buying any 4TB drives till they have 1TB platters and the price is under $150.

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I have yet to buy a HDD post flood and I will continue to do so till prices drop back down to normal.

Me neither. And I recommend to all my friends, family and co-workers to wait for the prices to regain sanity.

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Me neither. And I recommend to all my friends, family and co-workers to wait for the prices to regain sanity.

Corporate greed in case of WD/Seagate and 'sanity'- never go in one sentence together ;)

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Me neither. And I recommend to all my friends, family and co-workers to wait for the prices to regain sanity.

Same here.

What'S funny though, is that in Germany the new Seagate 7.2k rpm drives provide better GB/€ than even the WD Greens! Nevermind the performance and platter density advantage..

MrS

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You guys need to remember that there are only two desktop drive manufacturers now, WD and Seagate. I would be shocked if prices ever reached pre-flood levels. You've already seen one downside to this - warranty lengths being cut.

Edited by DigitalFreak

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You guys need to remember that there are only two desktop drive manufacturers now, WD and Seagate. I would be shocked if prices ever reached pre-flood levels. You've already seen one downside to this - warranty lengths being cut.

When profits are up on lower sales volume you know the HDD companies are price gouging just like other cartels.

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When profits are up on lower sales volume you know the HDD companies are price gouging just like other cartels.

Actually, those who understand basic economics know that when there is a supply shock of decreased supply, prices adjust higher in order to match demand to the decreased supply.

Edited by johnw42

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Of course when one of the two remaining companies takes a huge hit on their production capability, you expect prices for all drives to increase. Seeing most consumer drives double or triple in cost is a little ridiculous but I can't do anything about it other than refuse to buy drives and wait.

The big question will be, once production meets demand again, will prices fall back down to what they were before? Even if they do, that in my book means that they are still significantly higher than what prices would be had the flood never happened and prices had continued to drop as normal.

What really killed me is when WD and Seagate both announced that they were cutting warranties within 24 hours of each other. I've worked in the business world enough to know that it takes way more than 24 hours to make a huge change like reducing warranties. This means that one company wasn't reacting to the other. So either both companies were coincidentally planning on cutting their warranties and just happened to announce at the same time (not likely) or they are secretly working together instead of competing. When the only two companies left are clearly not competing in terms of warranties, than why would anyone delude themselves into thinking that they are competing on price?

I suspect that they will eventually be caught price fixing but it will be years from now and by that time the only victim will be the consumers.

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Actually, those who understand basic economics know that when there is a supply shock of decreased supply, prices adjust higher in order to match demand to the decreased supply.

Actually, johnw42, those who understand MORE than freshman or "basic economics" know that when there is a supply shock of decreased supply, prices CAN & OFTEN, but NOT always adjust higher in order to match demand to the decreased supply.

Then there's also the very REAL economic reality of oligopolies and PRICE GOUGING (ref: Seagate who was NOT directly affected by the floods, only indirectly by supplier problems), reduced competition and price fixing collusion, "back door" price hikes such as reduced warranties (Seagate and WD colluded to reduce warranties within one day of each other and there is 0.00% chance this was coincidence), both will now happily SELL you an "extended" warranty matching the old one at an inflated price, and the underlying reality of it all, opportunity and greed.

Do companies need to make a profit? Absolutely. Are these companies going to continue delivering old goods at higher prices, with shorter warranties, and near record breaking profits (mostly due to lies at this point)? They sure will, and we'll pay for it. There will be little or no price competition among these two new industry owning "friends"... ,

Let's all take a few minutes to feel sorry for Seagate while johnw42 learns how businesses - that are run by people, not academic theories - really operate...

See Financial News, 17th April 2012 22:48 GMT

"Seagate made huge profits of $1.1 billion on revenue of $4.4 billion in its third fiscal 2012 quarter......"

Edited by xcopy

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Actually, johnw42, those who understand MORE than freshman or "basic economics" know that when there is a supply shock of decreased supply, prices CAN & OFTEN, but NOT always adjust higher in order to match demand to the decreased supply.

In an unrestricted market, ALWAYS. If the supply of a product suddenly goes down, then in an unrestricted market, the only way for demand to go down to match supply is for the price to rise.

In a restricted market, when one group tries to force another group to sell at certain prices, the price may not go down but you will have shortages, rationing, bribes and corruption and underground markets.

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The big question will be, once production meets demand again, will prices fall back down to what they were before? Even if they do, that in my book means that they are still significantly higher than what prices would be had the flood never happened and prices had continued to drop as normal.

Probably not. I think the previous prices were unsustainably low. In my experience, Samsung was making the best HDDs. And Samsung is a HUGE company. And yet they found that the HDD business was not profitable enough for them to continue, so they sold their HDD business. This indicates to me that the HDD prices were too low to sustain the required R&D and production equipment investments while maintaining a profit margin equivalent to Samsung's other business units.

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