The flooding in Thailand that started in July is starting to be felt in the technology market. Many hard drive manufacturers have plants in Thailand, and the flooding is expected to cause shortages and price increases that may last through July 2012.
What does that mean to you, the consumer? Well, that all depends on what you're looking for.
For those out there that aren't very tech-savvy, a hard drive is a computer component where all your information is stored. They come in many varieties and come in internal and external forms. Most people are familiar with USB external hard drives for data storage. Both varieties are being affected by the floods that hit Bangkok.
For those that buy hard drives through a retail outlet by themselves are feeling the price shock already. Prices have risen over 50 percent in some cases, and the trend seems to continue upwards. The online retailer Newegg.com has put a limit to one hard drive per customer on its drives. That includes external USB and eSATA hard drives. It is not listed anywhere as a notice on the site, but when I contacted them, I was informed that " Newegg has limited quantities, and to be fair to all our customers we are temporarily limiting the number of hard drives that can be purchased to 1 per customer."
The instability in the market is not only affecting direct sales of hard drives, but is leading to a problem for computer manufacturers as well.
Apple CEO Tim Cook said he is "virtually certain there will be an overall industry shortage of disk drives." He believes that Mac line will be most affected at Apple. Lenovo, who produces the ThinkPad line of notebooks, has echoed that sentiment. Right now the industry is bracing for a shortage, and that means prices hang in the balance. Since Thailand accounts for nearly 45 percent of production worldwide, it is hard to imagine it won't affect prices. The bigger worry is if it will be felt this holiday season.
As consumers begin to gear up for holiday shopping, they should expect to see an increase in prices on computer systems. The hardest hit will be the low-priced netbooks, where an increase in price would reduce their appeal as holiday gifts. Consumers may see a rise of 10 percent or more, all hinging on current stock and how long it takes the industry to get back on its feet. In a time when computer sales usually see a boost, higher prices mixed with a still struggling economy results in a profit loss for computer manufacturers and their suppliers.
This situation is changing as details come out as to when flood waters will recede, what current hard drive stock looks like, and how long it will take for manufacturers to get up and running. One thing is for certain though, and that is that hard drives will be on hard times this holiday season.
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