It's been roughly six months since the devastating floods in Thailand, and the storage industry is still struggling in the wake of the destruction. Analysts predicted hard drive prices would jump in the months following, and unfortunately, that's precisely what we've seen.
But where do we stand now, and how long will it take for prices to stabilize once production is back to normal? We looked at price trends in our dealnews archives to get a better picture.
Today's External Hard Drive Deals Feature 2010 Prices
Prior to the September floods in Thailand, 1TB external hard drive deals had plateaued at about $48 to $50, with $48 being the all-time low. However, by the end of October 2011 prices on 1TB drives had jumped by as much as 16% from the previous month's low. And come November (a month where we typically see the best prices on electronics) 1TB hard drive prices had reached $90, the highest price we'd see all year for them. Prices began to decline in the months that followed, but the deals were short lived and quickly crept up again to around $73.
2TB drives have followed a similar trajectory. Back in September, deals on 2TB drives were hovering around the $60 to $70 mark. (To date, $60 has been the all-time low for a 2TB drive.) By the end of October, 2TB drives had jumped 11% from the previous month's low and by Christmas they had reached $105. Prices remained high throughout the first quarter of 2012, with deals in the first three months averaging about $100.
To put these prices into perspective, we looked in our archives and discovered that the last time we saw 1TB hard drive deals averaging $73 was at the start of 2010. Current 2TB deals also match 2010 prices, specifically those from the summer of that year. In both instances in 2010, we saw gradual price decreases, and after four months, deals on 1TB drives eventually hit a plateau and stabilized.
After the Industry Stabilizes, Could Prices Return to Normal 4 Months Later?
Experts disagree on precisely when hard drive production will catch up with demand. Some estimate that the industry is nearly there already and that prices will stabilize by the end of Q1, whereas others paint a more dire picture with prices remaining high through 2012 and possibly 2013. But not all news is grim. Seagate posted solid numbers for its fiscal Q2 earnings, largely due to the fact that its manufacturing plants weren't as affected by the flooding as expected.
Although we can't predict when today's prices will drop, we can look to the trends that occurred last time drives were priced this high. As such, once hard drive production has definitively caught up to speed, we wouldn't be surprised if deals on 1TB drives stabilized in four months time, given how long it took them to stabilize in 2010 at their lowest price. The question is: when will production ramp up again?
What You Can Expect to Pay for a Hard Drive Today
Unfortunately, for the time being, prices are expected to remain high with no immediate relief. But if you need a hard drive now and can't afford to wait, your best bet is to look for deals at or below $73 for 1TB drives and $100 for 2TB drives. It's also worth noting that in March we spotted only an $8 difference between the best 2TB hard drive deal and the best 1TB hard drive deal. So we also suggest keeping a sharp eye on 2TB hard drive deals as they might provide more value than a 1TB drive.
Keep your eye on the lowest prices for all hard drives by signing up for a dealnews email alert.