# HDD Crisis Was Fake: Seagate and Western Digital Post Big Profits



## lyndonguitar (May 3, 2012)

this true? 

Hard drive manufacturers *Seagate Technology* and *Western Digital* have reported great financial results after such a prolonged hard disk drive “crisis.” 

There was always talk about the fact that hard disk drives are so cheap, that the profitability of the manufacturers is getting low enough to limit the R&D investments they would otherwise make.

Many industry insiders were talking about overstocking and lowering profits. The situation was bleak. 


 One year ago, Samsung wanted to get rid of their HDD division, despite the fact that the products developed there were quite good. The F1 and F3 lines of desktop HDD are very good performers to this day, and they’ve been since way back in 2008.

Seagate jumped at the opportunity and snatched Samsung’s hard drive division for almost 2 billion dollars, back in April 2011.

Hitachi was also doing quite alright. They had good mobile HDDs and the very successful 1000.C hard disk drive line that excelled when dealing with multi-threaded work. Still, the marketplace for HDDs was so difficult that they’ve announced they’ll be selling their hard drive division to Western Digital.

The Thailand flood came and went and we were left with the hard drive “crisis”. While the hard drives were almost never “out of stock” the prices increased even by 300%. 

Months passed by, but there seemed to be no end to the hard drive crisis, despite the fact that both manufacturers were announcing the restoration of the plants affected by the waters.

In a report from earlier his year, we found out that Seagate even managed to increase its HDD shipments with around *2%* when compared to the previous year. Where exactly was that “crisis?”

Now Seagate proudly announces it has decided to spend 2.5 billion dollars to repurchase a considerable amount of its outstanding ordinary shares. Spending 2.5 billion dollars less than a year after buying Samsung’s HDD division for another 2 billion doesn’t really seem like a company “suffering” from a “crisis.”

Western Digital, too, has just announced its fiscal third quarter financial results. Despite recently acquiring HGST (that’s Hitachi’s HDD division) in March last year and also “suffering” from a “difficult crisis,” they’ve made a net income of 146 million dollars, or 62 cents per share.

"Our third quarter performance demonstrates the potential of the new Western Digital, with just three and a half weeks of HGST results combined with the standalone WD business," said John Coyne, CEO of Western Digital.

By their reasoning: bad market plus low margins plus the HDD crisis equals big profits.

Good job if we may say. We finally have a humongous duopoly in the hard drive market too. This is probably the most desirable situation for the end-users paying 300% more money for last year's technology.

We shall now wait and see when the prices go back to where they were one year ago, if ever. :shadedshu


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## Capitan Harlock (May 3, 2012)

this news is not a surprise but first you have to know than banks give money to everyone,if they have to make a good profit from togheter, banks and big lobby xd , its the same with this "crisis" , for me the only Crysis is the game not this global theater create from banks and other no-human people without respect for the others


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## NC37 (May 3, 2012)

You are surprised by this? 

When the big oil spills hit and everyone freaked, what happened the following year? Record profits and people screaming for the blood of their CEOs. Natural disaster is just another way for companies to say..."Ooo we can gouge now!!"


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## Peter1986C (May 3, 2012)

I think it might be (and I am but speculating now) that the manufacturers with want to speed-up the transfer process from magnetic spin-around storage towards solid state drives.


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## TheMailMan78 (May 3, 2012)

So a company with high demand and short supply reports record profit in the quarters of short supply and its a conspiracy? You people need to take some economics classes.


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## Athlon2K15 (May 3, 2012)

TheMailMan78 said:


> So a company with high demand and short supply reports record profit in the quarters of short supply and its a conspiracy? You people need to take some economics classes.



Indeed!!!!


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## Capitan Harlock (May 3, 2012)

TheMailMan78 said:


> So a company with high demand and short supply reports record profit in the quarters of short supply and its a conspiracy? You people need to take some economics classes.



economics classes= billions of words for tell you i grab all your money when i whant  , conspiracy is everywhere and usa is the top class of this shit , use your real mind not the mind in another spot


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## Artas1984 (May 3, 2012)

I was glad that HDD got more expensive when crysis hit, their prices were getting ridiculously low compared to the rest of components and SSD prices were ridiculously high.. When HDD crysis hit, at least buying an SSD seemed very reasonable - before it was just absurd to buy SSD.


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## Frick (May 3, 2012)

Capitan Harlock said:


> economics classes= billions of words for tell you i grab all your money when i whant  , conspiracy is everywhere and usa is the top class of this shit , use your real mind not the mind in another spot



I... Wow. Just wow.


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## Sasqui (May 3, 2012)

TheMailMan78 said:


> So a company with high demand and short supply reports record profit in the quarters of short supply and its a conspiracy? You people need to take some economics classes.



LOLz, too true, look at the record profits of Exxon and BP!  Supply and demand driving prices... supply can be real and it can be manipulated.

Remember the memory crisis and prices of DRAM in the 90's?


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## TheMailMan78 (May 3, 2012)

Capitan Harlock said:


> economics classes= billions of words for tell you i grab all your money when i whant  , conspiracy is everywhere and usa is the top class of this shit , use your real mind not the mind in another spot



The US is to blame for a "conspiracy" to price fix from companies mfg. plants located in south east Asia? Even for a conspiracy that sounds stupid. I guess Bush caused the tidal wave also with our vast navy of capitalist McDonald themed battle cruisers equipped with magical wave makers. Just so YOU would have to pay more for a HD.


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## Kreij (May 3, 2012)

I didn't know we had McDonald themed cruisers.
I knew about the Starbucks themed M1A1s, but this is cool. 
Learn something new every day.
Can you whip up a pshop of one of those, TMM?


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## lilhasselhoffer (May 3, 2012)

TheMailMan78 said:


> The US is to blame for a "conspiracy" to price fix from companies mfg. plants located in south east Asia? Even for a conspiracy that sounds stupid. I guess Bush caused the tidal wave also with our vast navy of capitalist McDonald themed battle cruisers equipped with magical wave makers. Just so YOU would have to pay more for a HD.



Ahem, I never thought I'd be saying this.  The MailMan is entirely correct in this.




Capitan Harlock said:


> economics classes= billions of words for tell you i grab all your money when i whant  , conspiracy is everywhere and usa is the top class of this shit , use your real mind not the mind in another spot



WHAT?!?  

To those who see a conspiracy, perhaps you should dislodge yourself from the anti-capitalism conspiracy.



To recap, economics of supply and demand are simple.  If you have no expenditures on resources, but an inventory that is constantly increasing in value, then your profit margins increase.  You increase the cost to consumers to prevent casual buyers from completely depleting reserves, so that critical applications still have access to the supply.  So less manufacturing costs and higher sales prices led to higher profits for HDD manufacturers.  Where is the rocket science?

BP caused an oil spill, which was supposed to be planned for.  The US government (my government) required BP to have a plan in case of failure, which was a near photocopied version of an arctic drilling plan (including measures to save the seals... in the Gulf of Mexico?).  The US government failed to make sure the "plan" by BP was adequate.  Subsequently, Bush era arctic drilling permission has made the US an oil exporter.  We export oil, and pay for it through the nose, because supply and demand is being followed (Middle eastern embargoes are making exporting oil very profitable).


Economics is simple, and nobody is trying to screw you.  If you want low prices then enjoy what Wallmart brings.  Otherwise, profit exists where demand is high and supply is low.  To attach a conspiracy to this is an insult to simple logic, and is sad to say the least.


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## Capitan Harlock (May 3, 2012)

TheMailMan78 said:


> The US is to blame for a "conspiracy" to price fix from companies mfg. plants located in south east Asia? Even for a conspiracy that sounds stupid. I guess Bush caused the tidal wave also with our vast navy of capitalist McDonald themed battle cruisers equipped with magical wave makers. Just so YOU would have to pay more for a HD.



its an exsample bring the us for talk about conspiracy, i dont have accuse the us for the price of hd but make a good search an look about the group bilderberg and see how much of them are american the majority , look how much money the pentagon spend for give petrol for tanks and low the money for the istruction , please use your mind really, i live in italy and here we have a lots lots of problems like all the country in europe but much much bigger , us is the top like england for money problems and its all real thing ,if in south asia they make good profit without give motivation about how they become riccher with the problems its a conspiracy xd, i dont think you accuse a thief for nothing , but with prove


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## TheMailMan78 (May 3, 2012)

Capitan Harlock said:


> its an exsample bring the us for talk about conspiracy, i dont have accuse the us for the price of hd but make a good search an look about the group bilderberg and see how much of them are american the majority , look how much money the pentagon spend for give petrol for tanks and low the money for the istruction , please use your mind really, i live in italy and here we have a lots lots of problems like all the country in europe but much much bigger , us is the top like england for money problems and its all real thing ,if in south asia they make good profit without give motivation about how they become riccher with the problems its a conspiracy xd, i dont think you accuse a thief for nothing , but with prove



I can honestly say I have no clue what you just said. However I did see you mention the "Bilderberg Group" which made me lol.


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## newtekie1 (May 3, 2012)

Is big profits really a surprise?  It isn't hard to understand why you get more profit when there is a shortage.

1.)  WD and Seagate didn't have to pay to employ the workers in the factories that got shut down.  Basically a hassle free layoff.
2.) The shortage allowed them to raise the price on the drives they were manufacturing and selling.  The cost per drive to them stayed the same, but the price they sold them for was doubled.  So their profit per drive was more than doubled.
3.) Demand was not all that affected by the higher prices.  So while the number of units sold was only slightly down, the profit per unit was greatly increased.


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## Peter1986C (May 3, 2012)

Thanks for the refreshment course in economics guys. I feel stupid now.


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## TheMailMan78 (May 3, 2012)

Chevalr1c said:


> Thanks for the refreshment course in economics guys. I feel stupid now.



lol Don't feel bad man. Thats what forums are for. Gotta take the dumb with the smart. Only way to learn IMO. newtekie1 said the same thing I did.....just more gracefully.

Record profits should have been EXPECTED during a crisis like this. If they reported a loss then people would be screaming for an investigation. Stock holders would have been PISSED.


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## babash*t (May 3, 2012)

Why am I reading economics on a tech site...


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## TheMailMan78 (May 3, 2012)

babash*t said:


> Why am I reading economics on a tech site...



Because you live in Kenya.


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## Kreij (May 3, 2012)

Chevalr1c said:


> Thanks for the refreshment course in economics guys. I feel stupid now.



Why? I think you made a very valid point about SSD adoption.
The companies that are producing SSDs want to see as them supplant traditional hard drives.
This is obviously a factor for the HDD companies as they must compete with their products in the same overall market. While artificial price increases are not out of the question (and have nothing to do with supply/demand profit scenarios), they still have to keep their market segment happy or they run the risk of losing it to the competition.


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## babash*t (May 3, 2012)

TheMailMan78 said:


> Because you live in Kenya.



Hehehehe, funny :-|


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## Peter1986C (May 3, 2012)

Kreij said:


> Why? I think you made a very valid point about SSD adoption.
> The companies that are producing SSDs want to see as them supplant traditional hard drives.
> This is obviously a factor for the HDD companies as they must compete with their products in the same overall market. While artificial price increases are not out of the question (and have nothing to do with supply/demand profit scenarios), they still have to keep their market segment happy or they run the risk of losing it to the competition.



Well, I should have expected the profits, as stated before by Newtekie and TMM.  And indeed, too much price increases for HDDs will push users towards SSDs but the latter have a worse price/dollar ratio so that will not happen that much yet I think.


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## Arctucas (May 3, 2012)

I am glad I had a half dozen spare HDDs just lying around...


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## qubit (May 3, 2012)

What, they milked the situation? Never! 

It's good to see it quantified. Thing is, there was a genuine crisis under all that: people died and factories were wrecked. However, they recovered much faster than they were letting on and they raked in the profits. Typical, really.


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## Cotton_Cup (May 3, 2012)

well whatever you me or anyone say, A Company Will Always Welcome Big Profit. ^_^ this we all do agree. I mean If I were to own a big company I'll milk out every worker and all the people of money at a small sacrifice, If I were to think about it in real life time. but for now non of us here know the real situation unless he is a board of directors or something on high position on those hdd company.

IMO HDD price now are a bit high and much higher than on other country (it's actually cheaper there in the US including your tax and stuff added together). since some items like in my country at least computer components on known brands, are almost similarly priced in the US market together with their tax added per item, as the certain items here are same price in the US + tax, and we even have a choice to get the official paper (receipt) we add 12% vat of the total price tag of that item,


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## TheMailMan78 (May 3, 2012)

Cotton_Cup said:


> well whatever you me or anyone say, A Company Will Always Welcome Big Profit. ^_^ this we all do agree. I mean If I were to own a big company I'll milk out every worker and all the people of money at a small sacrifice, If I were to think about it in real life time. but for now non of us here know the real situation unless he is a board of directors or something on high position on those hdd company.
> 
> IMO HDD price now are a bit high and much higher than on other country (it's actually cheaper there in the US including your tax and stuff added together). since some items like in my country at least computer components on known brands, are almost similarly priced in the US market together with their tax added per item, as the certain items here are same price in the US + tax, and we even have a choice to get the official paper (receipt) we add 12% vat of the total price tag of that item,



Well some people get mad computer components cost more in their nation then others. I sometimes hear people in the EU bitch about the unfair prices they pay vs US prices. And I cant say I feel their pain. After all I'm in the US enjoying cheap prices. However I know its not the manufacturer's fault. Its the respective nations their product is being sold in that's doing it. Taxes, VAT, tariffs all these take away from a companies bottom line. Yet people expect a company to take a loss on a product just because their own government over taxes the people. 

Now I am in no way saying all EU people. I'm just saying their are a lot of people out there that don't understand economics and love to blame CEOs, banks and the US for all their home grown problems.

See this is how it works....

1. HD costs 5 dollars to make.
2. Company sells it for 8 dollars.
3. In the US it retails for 10 dollars due to mild taxes and tariffs.
4. In the EU it retails for 20 dollars due to high taxes and tariffs.

Why should a company take a loss on something due to various international politics? They sell their HD for 8 bucks and whatever is added on the end by some foreign country is not their problem. Its not hard to understand there is no NWO fixing prices.


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## qubit (May 3, 2012)

I've just had it on good authority that this HDD article is BS and the author who wrote this has no clue. The disaster _was_ as bad as made out.

No, I can't reveal where I've got this from unfortunately, but I'm also being straight with you all.


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## Arctucas (May 3, 2012)

^Agreed^

All the people in the EU complaining about high prices, and then they brag about their "free healthcare" and "free education".


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## TheMailMan78 (May 3, 2012)

qubit said:


> I've just had it on good authority that this HDD article is BS and the author who wrote this has no clue. The disaster _was_ as bad as made out.
> 
> No, I can't reveal where I've got this from unfortunately, but I'm also being straight with you all.



The fact you needed someone to tell you this article is BS makes me sad.


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## qubit (May 3, 2012)

TheMailMan78 said:


> The fact you needed someone to tell you this article is BS makes me sad.



It shouldn't. Companies do inflate bad news to make more profit, so it's not so far-fetched.


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## largon (May 3, 2012)

Well, now that they have money to throw at R&D then I'll assume we'll start to see some actual progress? Instead of things such as this.


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## TheoneandonlyMrK (May 3, 2012)

lilhasselhoffer said:


> Economics is simple, and nobody is trying to screw you.



no thats exactly what supply and demand is based on and used for, and the end result is anyone buying a hdd Is getting screwed by a company , the company could just have easily sold the same amount of hdds at their old price, but who'd pay for their rebuilds then , we porbably still payed anyway with a grant or loan


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## TheMailMan78 (May 3, 2012)

qubit said:


> It shouldn't. Companies do inflate bad news to make more profit, so it's not so far-fetched.



That's called price gouging and price fixing and if caught is punishable under most nations laws. What you are saying is a collective of companies risked BILLIONS of dollars in fines to have a record profit that wouldn't cancel out the losses from fines if caught? Um yeah.......I'm sad anyone bought into this article.


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## qubit (May 3, 2012)

TheMailMan78 said:


> That's called price gouging and price fixing and if caught is punishable under most nations laws. What you are saying is a collective of companies risked BILLIONS of dollars in fines to have a record profit that wouldn't cancel out the losses from fines if caught? Um yeah.......I'm sad anyone bought into this article.



Yeah, companies price-fix quite often, taking the risk of getting caught, knowing that any investigation and punishments will take *years* to catch up with them.  They then gamble that they'll come out ahead in all this.

The LCD panel price-fixing scandal that broke recently is just one example off the top of my head. If you think these laws put them off that much, then you're the naiive one. C'mon man!


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## TheMailMan78 (May 3, 2012)

qubit said:


> Yeah, companies price-fix quite often, taking the risk of getting caught, knowing that any investigation and punishments will take *years* to catch up with them.  They then gamble that they'll come out ahead in all this.
> 
> The LCD panel price-fixing scandal that broke recently is just one example off the top of my head. If you think these laws put them off that much, then you're the naiive one. C'mon man!



Oh yeah the one that was never proven and they settled for like 500 million collectively without a conviction that had NOTHING to do with destroyed factories or price gouging?


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## qubit (May 3, 2012)

TheMailMan78 said:


> Oh yeah the one that was never proven and they settled for like 500 million collectively without a conviction that had NOTHING to do with destroyed factories or price gouging?



You've actually made my point right there. Anyway, I know how these conversations go with you and I don't wanna get into another pissing contest, so I'll leave it there.


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## TheMailMan78 (May 3, 2012)

qubit said:


> You've actually made my point right there. Anyway, I know how these conversations go with you and I don't wanna get into another pissing contest, so I'll leave it there.



Yes of course everyone is bought and paid for. How could I forget.


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## qubit (May 3, 2012)

TheMailMan78 said:


> Yes of course everyone is bought and paid for. How could I forget.



Ok, you have the last word on this, then.


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## Widjaja (May 4, 2012)

Bah....the disaster happened, HDD manufacturers rebuilt and recouped.
Then they left the HDD prices hiked for a positive result from the disaster.

Why not exploit a negative and turn it in to a positive, wouldn't you?


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## RejZoR (May 4, 2012)

Artas1984 said:


> I was glad that HDD got more expensive when crysis hit, their prices were getting ridiculously low compared to the rest of components and SSD prices were ridiculously high.. When HDD crysis hit, at least buying an SSD seemed very reasonable - before it was just absurd to buy SSD.



You got some strange logic there. Just because HDD prices were inflated, it's then ok to buy SSD's even though their price hasn't changed. Just because the difference was smaller. Lol?
Don't you think it doesn't even matter when you'd buy SSD then? I mean it would cost you the same in the end...


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## Solaris17 (May 4, 2012)

TheMailMan78 said:


> lol Don't feel bad man. Thats what forums are for. Gotta take the dumb with the smart. Only way to learn IMO. newtekie1 said the same thing I did.....just more gracefully.
> 
> Record profits should have been EXPECTED during a crisis like this. If they reported a loss then people would be screaming for an investigation. Stock holders would have been PISSED.



i saw graceful and lold i really do love you ya know. i think alot of people miss your warped sense of humor. getting back on topic im almost entirely certain i can tell my barber how close of a shave i want more gracefully then you could.




RejZoR said:


> You got some strange logic there. Just because HDD prices were inflated, it's then ok to buy SSD's even though their price hasn't changed. Just because the difference was smaller. Lol?
> Don't you think it doesn't even matter when you'd buy SSD then? I mean it would cost you the same in the end...



wut? i watched SSD prices dive like $100 a month or 2 into the shortage.


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## RejZoR (May 4, 2012)

If prices dropped 100 bucks a month (or two) i'd get my SSD for free. You're over-exaggerating it a lot... they got cheaper but not nearly as much as you say.


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## Solaris17 (May 4, 2012)

RejZoR said:


> If prices dropped 100 bucks a month (or two) i'd get my SSD for free. You're over-exaggerating it a lot... they got cheaper but not nearly as much as you say.



i dont think so at all. maybe it has alot to do with were youre location. Besides I never said it dropped 100 a month. Id appreciate it if you studied your reading skills.


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## Sh00t1st (May 5, 2012)

Lets not pretend there haven't been a plethora of companies and sometimes countries conspiring  to internationally fix prices for, ohhh, thousands of years almost.
I'm not saying the hd manufacturers engaged in the price fixing, but i would say that it appears as though the retailers may have done so, especially considering they buy in bulk shipments and almost instantly raised prices after the flood, but I'm not ruling out the supply and demand factor either, so maybe they didn't price fix maybe they did. Who knows lol.


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## m1dg3t (May 5, 2012)

This is news how? In economics/business there is a thing called "scarcity". They do it all the time, capitalism 101.

Tell me what to believe next o wise and powerfull corporation/media


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## _JP_ (May 5, 2012)

Arctucas said:


> All the people in the EU complaining about high prices, and then they brag about their "free healthcare" and "free education".


I think you're mistaking the EU for some communist country. I have to pay (considerably, might I add) for healthcare and I do pay for education.


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## Frick (May 5, 2012)

_JP_ said:


> I think you're mistaking the EU for some communist country. I have to pay (considerably, might I add) for healthcare and I do pay for education.



Are you talking about taxes? Because I don't pay for either healthcare or education. Well I do pay up to €240/year for healthcare (including prescribed meds). And I am bragging about it as much as I can. ^^



Solaris17 said:


> Besides I never said it dropped 100 a month. Id appreciate it if you studied your reading skills.



You did say *exactly *that.



Solaris17 said:


> wut? i watched SSD prices dive like $100 a month or 2 into the shortage.



I would apprieciate if you imrpoved your writing skills.


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## _JP_ (May 5, 2012)

On-T: HDD rices here are starting to drop, albeit very slowly. The thing here is, when prices sky-rocket, it's like radioactive fallout, nobody even considers the idea (of buying), unless it's a matter of life or death. SSD prices have also dropped, but not too much. The good thing is that some models already are ay 1€ per GB (temporarily, because it is a sale). 


Frick said:


> Are you talking about taxes?


Taxes included.


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## lilhasselhoffer (May 5, 2012)

Price fixing /= supply and demand /= price gouging.

In price fixing a pair, or more, of companies set out to prevent a decrease in price for a given commodity.  The goal of price fixing is to maintain an increasing profitability, as the cost of manufacturing goods decreases.  This both increases profit for the manufacturer, and prevents pricing wars.

Price gouging is intentionally charging a large amount of money for a good, because there is no alternative.  We see this often with patent trolls, but it occurs in markets where there is only one source of a commodity.  When goods cannot be purchased from another source the supplier can charge what they want for it.  

 We've discussed supply and demand in previous posts.



So; there was no price fixing, the basic rules of supply and demand were followed, and there was no price gouging.

Supply on hand was a constant.  The sellers might have a given number of parts, but they cannot get more.  Price increases, to compensate for a fixed and non-replenishing supply.  While saying that the supplier gouges the consumer is easy, it is inaccurate.  Higher prices were a repercussion for a constantly diminishing supply of that good.  

The only part of the equation that is up for debate is how fast the prices rose.  If you going to argue this point, then at least come to the table with numbers that prove how the price increase cut sales so dramatically as to prevent any of them from being sold.  It sucks that HDD prices increased, but it isn't a conspiracy against the consumers.


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## Frick (May 5, 2012)

_JP_ said:


> On-T: HDD rices here are starting to drop, albeit very slowly. The thing here is, when prices sky-rocket, it's like radioactive fallout, nobody even considers the idea (of buying), unless it's a matter of life or death. SSD prices have also dropped, but not too much. The good thing is that some models already are ay 1€ per GB (temporarily, because it is a sale).



Aye the same here. Now you can get a 2TB drive for €100. 1TB is €85 though and 500GB is €65. So we're getting there.


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## m1dg3t (May 5, 2012)

lilhasselhoffer: They faked "scarcity" in order to justify the price increase and also as you pointed out in your post there aren't other option's except for SSD, which cost more. Which further aid's their "plan" to maximize profit's 

The consumer never win's


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## Frick (May 5, 2012)

m1dg3t said:


> The consumer never win's



And in the end you die anyway. Just kill yourself, it's the only right thing to do.


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## Kreij (May 5, 2012)

Someone hears a rumor that someone may fart in the middle east and our gas prices go up.
Speculation is a wonderful thing.


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## m1dg3t (May 5, 2012)

Frick said:


> And in the end you die anyway.



I will never cease to exist, death is irrelevant to me. 



Frick said:


> Just kill yourself, it's the only right thing to do.



Such a Sweedish thing to say


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## qubit (May 5, 2012)

Kreij said:


> Someone hears a rumor that someone may fart in the middle east and our gas pries go up.
> Speculation is a wonderful thing.



Oh god I can smell it from here!


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## PopcornMachine (May 5, 2012)

I think the situation to cause shortages was real, but the companies involved took advantage of the situation.


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## Fourstaff (May 5, 2012)

PopcornMachine said:


> I think the situation to cause shortages was real, but the companies involved took advantage of the situation.



I bet they are praying hard for another flood


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## Kreij (May 5, 2012)

PopcornMachine said:


> I think the situation to cause shortages was real, but the companies involved took advantage of the situation.



So the situation (flood) was real, the shortages were real, demand exceeded supply causing price increases and that's the company taking advantage of the situation?

I'm missing something.


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## Fourstaff (May 5, 2012)

Kreij said:


> So the situation (flood) was real, the shortages were real, demand exceeded supply causing price increases and that's the company taking advantage of the situation?
> 
> I'm missing something.



They definitely did take advantage of the situation, but its the right thing to do as a company whose mandate is to maximise returns to its investors.


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## PopcornMachine (May 5, 2012)

So I got one who gets it, one who doesn't. 50% not bad.

Just saying that prices were raised more than they needed to be.

It is the capatalist way.


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## Kreij (May 5, 2012)

Well, considering that getting things in and out of an area ravaged by flooding may be quite costly, or getting the alternative supppliers may be a logistic nightmare on short notice, it's possible it was costing them a lot more to do business than usual.
Just tossing out ideas as we don't exactly know if the price increases were all retail generated (as opposed to the manufacturers).

But ... we need someone to blame ... so I blame Canada.


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## qubit (May 5, 2012)

Kreij said:


> Well, considering that getting things in and out of an area ravaged by flooding may be quite costly, or getting the alternative supppliers may be a logistic nightmare on short notice, it's possible it was costing them a lot more to do business than usual.
> Just tossing out ideas as we don't exactly know if the price increases were all retail generated (as opposed to the manufacturers).
> 
> But ... we need someone to blame ... so I blame Canada.



The floods, deaths and damage were as real as can be and as awful as made out. However, it stands to reason that the companies affected would try to cushion the blow as much as possible by keeping prices as high as possible for long as possible. Frankly, anyone else can do the same and while I don't like being on the receiving end of a price hike, I don't condemn them for it like some people are. I'd do the exact same thing in fact and anyone who didn't would be a fool.

So, who to blame? Oh well, it's obviously yourself Kreij. _Anyone_ can see that!


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## lilhasselhoffer (May 6, 2012)

PopcornMachine said:


> So I got one who gets it, one who doesn't. 50% not bad.
> 
> Just saying that prices were raised more than they needed to be.
> 
> It is the capatalist way.




Help me understand you.  What gives you the authority to say that prices were raised too far?  Are you a raw materials supplier for the HDD factories, a worker at the factories, a manager of the manufacturing company, a person who ships the HDDs to their destination, or a purchaser for a large name computer manufacturer?

Do you have first hand knowledge of what it will cost to rebuild the factories?  Perhaps you rendered physical aide to the natural disaster stricken area after the fact?

No.  Then shut it.  We all hate price hikes, if you remember I said:


lilhasselhoffer said:


> The only part of the equation that is up for debate is how fast the prices rose.  If you going to argue this point, then at least come to the table with numbers that prove how the price increase cut sales so dramatically as to prevent any of them from being sold.  It sucks that HDD prices increased, but it isn't a conspiracy against the consumers.



Given that you have no data to show the prices were raised too high, it's time you either get some or shut it.  I can't justify the pricing, but the burden of proof lies on you if you're going to trumpet that it was too far.



As to SSD adoption, they're seeing a sales boost due to price decreases related to more manufacturers putting out more options; additionally, the maturation of the manufacturing process has let them see the same drops that accompany all maturing technologies.  While the flooding was fortuitous (for SSDs, the human toll is beyond horrifying), it wasn't exactly a master minded plot to replace HDDs.  Heck, they still aren't anywhere near the cost of HDDs for storage purposes, even if they are a much faster option for OS drives.  This price gap was still huge, even when a 2 TB HDD cost 300 USD.


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## PopcornMachine (May 6, 2012)

lilhasselhoffer said:


> Help me understand you.  What gives you the authority to say that prices were raised too far?  Are you a raw materials supplier for the HDD factories, a worker at the factories, a manager of the manufacturing company, a person who ships the HDDs to their destination, or a purchaser for a large name computer manufacturer?
> 
> Do you have first hand knowledge of what it will cost to rebuild the factories?  Perhaps you rendered physical aide to the natural disaster stricken area after the fact?
> 
> ...




It's my opinion.  Didn't realize I needed any authority to express an opinion.

Why so angry.  Work for or own stock in WD?

Don't know who the heck you think you are, but no one tells anyone to shut it. You are way out of line.

And this may come as a shock, but I neither remember or care what you said.  Certainly will make a note to ignore your comments in the future.


Did I mention I think they raised disk prices higher than they needed to.


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## Aquinus (May 6, 2012)

I think everyone should calm down and be happy that prices have been coming down on HDDs. Even if a WD RE4 costs twice as much as it would have if the floods never happened, but stuff happens, and honestly, when supply goes down price goes up. Why sell hardware that has a dwindling stock at the same price. Increasing price has the two fold effect of bringing in more revenue because people need hard drives and will still pay the premium price while reducing the number of hard drives being bought because of the price, therefore slowing the decline of hard drive stocks.

Western Digital isn't at fault, it's companies like Seagate who raised prices because WD couldn't compete.


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## Evolved (May 6, 2012)

I'm not surprised.

I knew from the start that WD and SG were milking it.

Both companies definitely used the flood as an excuse to gain more profit.

There was literally no shortage of HDD's at my store.


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## Peter1986C (May 6, 2012)

Evolved said:


> There was literally no shortage of HDD's at my store.



That is but one store of many. Additionally, where in the world is it located and is it a retailer or a "Retailers'supllies" kind of store? I smell a bad deduction here.


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## syeef (May 6, 2012)

In my country 1TB HD used to go for 7,000 BDT, now it is going for 14,500 BDT. Waiting for several months for the price to come down so that I may get one.


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## Peter1986C (May 6, 2012)

It doubled at your place, that is quite extreme.


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## Aquinus (May 6, 2012)

Frick said:


> Shut it. Shut it. Shut up.



Stop trolling, and don't post unless you have something to talk about on topic. This is about HDDs, not how another person makes deductions.


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## m1dg3t (May 9, 2012)

Kreij said:


> So the situation (flood) was real, the shortages were real, demand exceeded supply causing price increases and that's the company taking advantage of the situation?
> 
> I'm missing something.



The flood was real. You honestly think they keep/kept all their "egg's in one basket" 

The corporation's are a lot smarter than we are, that's why they're rich and we're poor


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## lilhasselhoffer (May 9, 2012)

PopcornMachine said:


> Why so angry.  Work for or own stock in WD?
> 
> Don't know who the heck you think you are, but no one tells anyone to shut it. You are way out of line.
> 
> ...



I don't own any stock.  I don't believe that you are basing a conclusion on any facts, but you are proposing that a company is slighting you.  By the same standards:

There is a conspiracy on auto insurance.
There is a conspiracy on gasoline prices.
There is a conspiracy on the moon landing.

All of these statements are made without any basis in fact, but must be true because I said so.  Do you see the problem I have believing a conspiracy exists, when no facts are presented.  I suggest that there is no conspiracy, but agree with you that prices are too high.  It sucks, but isn't a conspiracy as the OP stated (and what the subsequent discussion was about).  On top of that, neither you nor I have the knowledge about current pricing (my first hand knowledge is 6 years old) so stating that it was too high isn't up to either of us.  The only reasonable conclusion is that we all shut up about a conspiracy, not to stop railing for more reasonable pricing. 




m1dg3t said:


> The flood was real. You honestly think they keep/kept all their "egg's in one basket"
> 
> The corporation's are a lot smarter than we are, that's why they're rich and we're poor



Perhaps you don't understand the reality of manufacturing.  Several millions, or hundreds of millions, is spent on a factory.  They produce a products, whose profit curve looks like a bell.  They only start making money after a while, and they don't make back their initial investment for years.  

You can't just build a dozen plants scattered around the globe, because companies don't run in debt like the governments seem to.  The reason that the factories are built where they are is access to workers, resources, and low cost.  These three factors come together in very few places.  So even if companies could afford multiple location, they may not have the location to build in.  On top of this, natural disasters aren't something you expect, by their very nature.  

So the only theoretical remainder is a stash of HDDs kept somewhere.  That is unlikely, as the storage wars have driven profit margins down very low.  Lower profits mean that very few units can be kept in storage before the bottom line is hurt.  So no "secret eggs" there.  Seems like they couldn't be hiding anything...




Evolved said:


> There was literally no shortage of HDD's at my store.



By the same logic, there is no oil shortage.  I have several local gasoline stations, and the pumps there always have fuel.

Kinda sounds funny when I say it out loud?

You are looking at the store front, and denying the rest of the supply chain exists.  Unfortunately, life doesn't work cleanly as that.


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## m1dg3t (May 9, 2012)

lilhasselhoffer said:


> Perhaps you don't understand the reality of manufacturing.



As a matter of fact it is obvious to me that YOU don't understand the reality of, well, reality lol

At this point i'm going to agree to disagree with you and politely bid you good day


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## lilhasselhoffer (May 9, 2012)

m1dg3t said:


> As a matter of fact it is obvious to me that YOU don't understand the reality of, well, reality lol
> 
> At this point i'm going to agree to disagree with you and politely bid you good day



Agreed.  Last post, and anyone else is welcome to the final words.


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## xenocide (May 9, 2012)

There's a difference between there being a shortage and rising prices, and prices doubling or tripling over night because they MIGHT run out.  As an analogy, Gas prices have been on the rise and slightly falling as of recent, but never did it go from $4/gal to $8/gal over night.  That's basically what happened with HDD's, and it is just unheard of.

The price adjustments usually come from the people at the highest end of the chain adjusting for increased demand or diminished supply.  If that was the case, we should have seen HDD prices slowly increase over days or weeks because they were starting to get low on them.  It is entirely speculation when you preemptively jack up prices expecting that maybe at some point there will be a severe shortage.  We should have seen 1TB HDD's go from $60, to $80/90, up into the hundreds, and then peak just before the factories came back online at the sky high prices we saw for a few months.


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