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Hard drive prices drop as PC demand rises

Intense competition between hard drive vendors is also pushing costs down

Competition from flash memory and increased shipment of PCs and consumer electronics are driving down prices and fueling demand for hard disk drives, according to a survey released by iSuppli Wednesday.

Average pricing of notebook hard drives tumbled, falling to US$53 in the third quarter of 2007, from US$86 in the same period during the previous year. Desktop hard drive prices fell to US$51 in the third quarter of 2007, compared to US$52.75 the previous year, according to the survey.

Overall, about 134 million hard drives shipped in the third quarter of 2007, compared to 114 million the previous year, a 21 per cent year on year increase, iSuppli found.Prices also dropped from intense competition between six hard drive vendors: Seagate, Western Digital, Hitachi Global Storage Technologies, Fujitsu, Toshiba and Samsung, said Krishna Chander, senior analyst at iSuppli.

The most popular notebook hard drives were in the 100GB range, which carried an average price of US$50, Chander said. Low-cost desktop PCs, especially in Asia, shipped with cheap US$40 80GB hard drives that brought down the average selling price of desktop hard drives, Chander said. The price of 320GB desktop hard drives averaged $65, Chander said.

Lower-capacity notebook drives witnessed smaller price drops, while newer high capacity drives saw massive price drops, Chander said. Notebook drives with 320GB of storage will drop because of new features, while prices will stabilize on lower capacity notebook storage devices like 80GB hard drives, Chander said.

Comparatively, desktop hard drive prices are stable even as storage capacity approaches 1T byte, Chander said. Lower-capacity drives are phased out and users replace those with higher capacity drives while expecting the same price.

Prices for hard drives may also drop as flash memory evolves, he said. Flash memory supplements hard drives on hybrid drives, but as flash makes inroads into the storage market it could drop hard drive prices, Chander said. “Flash is an added bonus to bring hard drive prices down,” Chander said.