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…Seagate-ST3500418AS-vs_-Western-Digital-WD5000AAKS

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%. …

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…

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


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