Hard drive prices (and innovation) decline

Hard drive prices (and innovation) decline

Summary: The price hikes from the Thailand flooding in late 2011 are fading fast. So are increases in drive areal density. Is stagnation the new normal?

TOPICS: Storage, Hardware

Hard drive price watching firm PriceG2 — through Storage Newsletter — reported that hard drive prices declined 5 percent in the first quarter of 2013. While good news for consumers, expect to see even steeper declines this quarter.

Why? Because an accelerating sales decline in PCs is meeting a rising tide of disk drive production.

The bad news? Vendors can afford to do this because they're cutting back on hard drive innovation.

There are two reasons for this. First, hard drives capacities have outstripped the needs of most consumers and system builders. Second, vendors have decided it isn't worth investing heavily in the technology required for areal density increases.

Yes, hard drives will continue to get cheaper, but at a slower rate. Say goodbye to the 40 percent annual increases in areal density and drive capacity that we got used to in the first decade of the 21st century.

The Storage Bits take  

As I noted last fall,"... with PC sales declining and the threat of SSDs, drive vendors can't afford to get greedy on pricing". They got a welcome burst of profitability thanks to the floods, but that was a one time event.

Your best deals in hard drives are external hard drives (preferably with a USB 3.0 interface) rather than raw drives. I'd love to know how they compute internal transfer pricing to make external drives cheaper than internal drives, but I guess that's for finance people to know and the rest of us to wonder at.

If you have a choice, I would wait another three months before buying any 4 terabyte drives. It usually takes 3 to 6 months for a new drive capacity to get the production bugs out, yields up, and marginal costs down.

Today, the sweet spot is in the 2 to 3 TB drives. Yet 4 terabyte drives are also coming down in price as availability improves, and should hit the sub-3¢/GB level by the second half of 2013.

You can also expect to see Western Digital and Toshiba follow Seagate's lead into hybrid drives. There is substantial room for performance improvements and creative engineering to make hybrid drives higher-margin.

Comments welcome, as always. Find any good deals lately?

Topics: Storage, Hardware


Robin Harris has been a computer buff for over 35 years and selling and marketing data storage for over 30 years in companies large and small.

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  • 4TB for $110

    Great news for 'home cloud' builders...
    • Yup.

      They will all be running reliable open source cloud implementations...
      on top of Linux or BSD.
  • External drives cheaper?

    I've found both at bestbuy.ca and the more local (for me) Canada Computers chain, external 2TB is $110-125 while internal is $95-110 for the same 2TB drives (but usually with better specs).

    Jumping to 4TB, some external are cheaper because they're actually two 2TB internal drives, and usually older technology at that. That said, I think 4TB just isn't common enough for prices to drop. Right now they're at 4-6¢/GB and even 2TB drives are 4.5¢/GB, so I'm not sure where 3¢/GB comes from unless it's older, SATA2-gen hardware, or has some other flaw that makes it less desirable to system builders. (Slow speed, inefficient cache, etc.)
    Louis St-Amour
  • OMG!

    Even 10¢/GB is utterly amazing considering I remember paying $300 for a 150MB internal drive!!
    The Danger is Microsoft
    • I am trying to forget those prices

      My first HDD was a 140MB 5.25" full height ESDI monster. With Stacker it was HUGE.
      • My first HDD

        Was $300 for 30MB - and I got a deal! - back in oh, 1989.

        A few years later I paid $400 for a 10MB CF card for my much-liked Omnibook 300.

        R Harris
      • first drives

        My first drive was an 5MB sized ST506, followed by 10MB and 20MB Seagate drives and those later could be formatted to 30MB using the RLL controller. Then, a big 40MB drive came for my VME UNIX system followed by the massive 80MB Seagate ST4096 in 1996-7 I think.

        My colleagues are probably right I am an Seagate fan - my last purchase of yesterday were some Savvio 10k.6 900GB drives. For some reason, other brand disks almost always fall on me,
    • $1 per MB was a big deal, then $1 per GB was a big deal.

      It was a great day when 200MB drives hit $200. My first drive was a 40MB for $500.
  • Supply and Demand.

    "I'd love to know how they compute internal transfer pricing to make external drives cheaper than internal drives, but I guess that's for finance people to know and the rest of us to wonder at."

    I'd love to know why you put this sentence in your story. I find it hard to believe you are as ignorant as the people who buy an external drive instead of an internal drive just because they don't know how to physically install one.

    Add that to the other reasons (no open internal sata slots, swapping convenience, backup drives) that other people choose to buy the external drives and the answer is simple.
    • huh?

      Huh? I think you're missing the point. All he's saying is that an external drive is nothing more than an internal drive + enclosure, and that in many cases it's cheaper to buy the external drive, toss the enclosure and install the guts in your PC than to buy the naked drive and install it on your PC.

      And yes, the reason clearly is market demand and pricing models, but that doesn't make it any less un-intuitive or wasteful.
      • unfortunately

        Some manufacturers, WD? omit the SATA interface from the external drive and integrate the USB bridge directly on the drive logic board. You just can't put such drive inside your PC, unless you get some fancy USB cables off the motherboard USB headers.
  • It's true

    Internal/External drives are identical and the externals also have a housing, mechanicals and a power supply but they still cost more than a bare drive. Strange.

    I generally use dual layer dvds for archiving because i fear mechanical failure of a hard drive more than aging of dvds. But now with 3 tb external drives under $ 120 it's not only cheaper but I can basically mirror my data on 2 hard drives and it's less than a tenth of a cent difference to storing it on a single dual layer dvd ! Plus it's much easier to find stuff on hard drive than having to sort though hundreds of dvds.
    • DVDs

      I stopped using DVDs for archiving few years ago. It's useless. You spend so much time arranging the data to fit into DVDs, burning, verifying... just to find out a year or two later that the disks are already unreadable. Just use spinning disks, make two or three copies etc --- the process of writing and reading data is so much faster! Plus, they take way less space.
  • What about cloud drives?

    "First, hard drives capacities have outstripped the needs of most consumers and system builders. Second, vendors have decided it isn't worth investing heavily in the technology required for areal density increases."

    What about growing demand for cloud storage? What kind of drives Google, Facebook, Twitter and Microsoft use? Don't they need drives with higher areal density, consuming less power and more reliable?
  • Uhh, what?

    While I agree that density progress has stalled, so has price drops. There was a drop at the beginning of the year, and they've been stagnant since. I got a bunch of 2TB 5,900 RPM Hitachi drives before the floods at $70 each. Almost 2 years later and 2TB 7,200 RPM Toshiba drives are $100. Sorry, but 3TB 7,200 RPM drives should be $100. Go to a brand like WD or Seagate you know will be there in a few years if the drive craps out, and you're going to be paying like $200 for a 2TB drive that will work right with a hardware RAID card.