Seagate announced that its 2.5″ hard disk market has almost completely recovered to pre-flood levels. While this news may seem good at first for consumers, for Seagate the short supply helped push prices up about 28%, leading to soaring profits for Seagate. Seagate reported that its net income was 4.5 times higher than the same period a year ago. Its revenue in April also increased 165% over April 2011, partly helped by the integration of Samsung’s HDD business.
While the laptop HDD market is near full recovery, the desktop hard drive market is likely to remain in short supply through the second half of the year. Seagate also said that it is shipping drives with an average of 15% higher capacity than the competition. With a higher price tag on larger capacity drives, this also meant it was earning more per HDD shipped than the competition.
Finally, Seagate has also managed to secure long-term agreements with OEMs with prices favourable to Seagate, so with higher than average prices and these agreements lasting 12 to 18 months, this along with improved production also guarantees strong profits for Seagate.
Unfortunately for the consumer, this means that hard disk prices are unlikely to fall to pre-flood levels for another year or two, especially desktop HDDs which are still in short supply.