Disk-drive prices are continues to fall or seen stabilizing recently. Two top makers of disk-drives, Seagate Technology and Western Digital, recently announced that their fiscal fourth quarter earnings will be less than the Wall Street analyst expectations. Industry experts expect the prices to fall another 4 percent within the near future and the price decline to continue.
One big reason for the falling price is competition. It is not coming from other disk-drive makers, rather from other technologies. Apple’s success is key to the fall of disk-drives. Apple uses flash memory chips in its laptops instead of disk-drives. Apple’s iPad is selling like hot cakes which are also contributing to lack of demand for disk-drives.
Another reason is price fluctuations. Seagate and Western Digital do not have the same profit margins like Apple from their disk-drives. Apple’s advantage is that they can maintain the price much more than others.
Recent news of new products such as Google’s Nexus 7 tablet, Samsung Electronics’ Galaxy S III, and HTC’s One smartphone devices are not helping the disk-drive makers either.
One strategy that is being used by both companies is to buy other manufactures or to consolidate. Whether this will work is yet to see.