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.
Follow us on Social Media!