Microsoft’s Surface RT tablet rollout came and went without much fanfare. Although Redmond’s first crack at the tablet market received relatively positive reviews, consumers seem unfazed and many of them are choosing to trade in their new tablets.
The hard drive industry was hit hard by heavy flooding in Thailand back in 2011. Several plants, providing vital components for Seagate and Western Digital, temporarily went off line following the disaster. The shortage caused a massive surge in hard drive prices and its effects are still being felt.
Keen to provide a bit of perspective, Xbit Labs compiled an interesting chart of hard drive average selling prices, based on data from Seagate’s and Western Digital’s SEC filings over the last four years. Pre-flood average selling prices (ASPs) were between $45 and $55, but they soared to the $70 mark in Q4 2011. The recovery was painfully slow and although some rather optimistic analysts claimed the market would stabilize by mid-2012, we are still feeling the muddy aftertaste of Thai flood water.
According to the latest figures, average selling prices decreased to $62 – $63 per unit and they are still considerably higher than pre-flood prices. Prices are currently at 2008 levels, which means they are still too high for comfort. Of course, the effects of the global economic downturn and recent PC slump were not factored into 2008 pricing and ASPs should be significantly lower today, even after they are adjusted for inflation.
This is bad for consumers and system integrators alike, as they have to adjust their own margins to compensate for the higher prices. What’s more, hard drive makers are probably not too keen to reduce their ASPs, as further cuts would negatively impact their margins while they are still reeling from flood-related losses. Western Digital CEO Stephen Milligan confirmed the company has more capacity, but it is throttling it to what it sees as demand, which is a polite way of saying WD is trying to keep prices artificially high.
It is even worse for end consumers looking to upgrade their PCs or get some cheap portable storage. Back in mid-2011, per-terabyte retail prices were at their lowest point, about €25 in European markets and a 2TB 3.5-inch drive cost roughly €50. By November 2011, per-terabyte prices hit €35 to €38 and they went on to peak at €50 to €55 by April 2012. Retail prices today are still significantly higher than in 2011 and they are in the €38 to €40 range across Europe.
Xbit also concluded that ASPs peaked in Q4 2011. In the meantime, SSD prices continued to tumble, but SSDs are still too costly to completely replace traditional hard drives. However, SSD shipments are expected to double in 2013, as they are the preferred storage option for Ultrabooks.
Hybrid drives are also entering the fray and they can be found in quite a few budget ultrathin notebooks, although their days in proper Ultrabooks are numbered. So far Seagate is the only hard drive maker to offer 2.5-inch hybrid drives in retail, but Western Digital is also entering the market and it showed off its first consumer friendly hybrid drives at CES.
Traditional hard drives are not going anywhere yet and it is evident that WD and Seagate have enough room to maintain a huge price advantage over SSDs, as they are artificially inflating prices. They can’t bridge the performance and power consumption gap, but by offering hybrid drives they can bring the best of both worlds to value-minded consumers.
According to the analyst company’s Storage Space Market Brief worldwide SSD shipments are set to rise to 83 million units this year, up from 39 million in 2012.
Shipments are set to continue to rise 239 million units in 2016, which the company said amounted to around 40 percent of the size of the hard disk drive (HDD) market.
SSDs can serve as an alternative to hard disk drives in personal computers and work by storing data using NAND flash memory semiconductors rather than through traditional rotating media.
In its report, IHS looked at traditional solid state drives in both the consumer and enterprise segments, as well as cache SSDs that along with an HDD component make up a composite storage products such as those found in Intel’s Ultrabooks.
The company said that Ultrabooks had played a part in the slump of SSDs last year. It said that despite SSD shipments rising by 124 percent, growth had fallen short of expectations because sales faltered – due to poor marketing, high prices and a lack of appealing features.
It said the future depended on the new generation of Ultrabooks, which if, as predicted, take off this year, will see the SSD market growing at robust levels.
Intel, which has been plagued by poor Ultrabook sales despite all of its bluster, is still trying to break into the market, introducing a new range loaded with Windows 8 and Haswell microprocessor architecture.
However, other factors are also involved when it comes to the SSD market, with IHS pointing out that average selling prices for NAND flash memory have come down, in the process establishing new price expectations.
The lower prices are attracting deal-seeking consumer enthusiasts, as well as an increasing number of PC manufacturers that are now more willing to install the once-costly drives into computers.
Over in the enterprise sector, SSD use is also growing as a result of product introductions from major vendors and startups.
The comments from Bob Raikes, principal analyst at Meko, come as yet another two companies went to war late last week over patent infringement claims. This time it was Samsung who went after its rival LG, filing a suit and seeking invalidation of its patents on LCDs.
However LG was not blameless in the spat, kicking off the fight last month when it raised three patent infringement claims on LCD technologies against Samsung. In court documents filed last month in the Seoul Central District Court LG pointed the finger at its enemy, claiming that the Samsung Galaxy Note 10.1 infringed on three different patents related to LG’s In-Plane Switching (IPS) technology.
This led Samsung to retaliate with a an intellectual property tribunal, where it moaned to the court that three LCD patents held by LG Display were invalid as a result of existing patents on the same technology.
The spat is just one of many to come from tech companies with patent infringement claims been thrown about left, right and centre.
Samsung has had its fair share, going to war with LG in the past as well as well publicised disputes with Apple in the US.
However, it seems the war within the LCD and OLED markets may continue.
“The period of the development of LCD has been a period of cooperation and
competition,” Mr Raikes told ChannelEye.
“Basically, everybody uses very similar technology, materials and equipment. As a
result the industry grew very quickly and costs came down very rapidly. However, nobody made any money.
“For OLED (and there are no other technologies currently on the horizon),
the companies are trying to make profit, so there is relatively little cooperation. They know this is going to be slower, but they don’t want a repeat of the financial mess that the LCD industry is in.
“LG and Samsung use different technology, materials and manufacturing
techniques and equipment. Sony & Panasonic & AUO are collaborating on parts
of the technology, but only parts. They use different materials and techniques to the two Koreans.
“All of them will fight over who is doing what to try to protect their uniqueness.”
The network company, which claims to support around 12,000 partners, has decided to take advantage of the growing cloud trend and incorporate these products into its services.
Of course, this isn’t a ground-breaking ploy, with companies moving to take advantage of the cloud and the revenue it offers for a good few years now, and it could be argued that the company has been a bit slow on the uptake.
However, Juniper is pushing ahead also announcing a range of new support, maintenance and professional partner services.
It says its Partner Advantage Cloud programme will depend on, rather than compete with, partners and help to bring “cloud-ready products to the market”. It also claims its strategy is to acknowledge partner cloud service and infrastructure capabilities and connect them with Juniper’s technology partnerships to create cloud-ready bundles that are easier for providers to deploy and manage. Whatever that means.
Partners in the programme will be given relevant tools and resources to drive cloud differentiation and growth.
The company has also outlined two specific areas: Partner Support Services and Partner Professional Services.
Juniper’s Partner Support Services will focus on support and maintenance services with partners treated to four new services troubleshooting workshops, including service provider routing, enterprise routing, enterprise switching and security, designed to help partners improve service delivery effectiveness, later this year.
Juniper’s Partner Professional Services is said to focus on validating partners’ professional services capabilities. We assume there will be a cost. Juniper didn’t say.
The programme also promises revenues and rewards to partners, although how hard they have to work, or how much they have to originally stump up for marketing and training to achieve this, is anyone’s guess.
US security company Insight is hoping to win shedloads of British government contracts by partnering with a UK data encryption company called DESlock.
Insight has been around since 1988 and provides hardware, software and services solutions to business and public sector organisations across the pond.
According to Luke Ambrose, UK Product Manager – Security Software, at Insight, his company is working hard to increase its channel on this side of the Atlantic.
Working with companies like DESlock gives Insight inroads into the lucrative UK government contracts as well as home grown products.
DESlock’s flagship data encryption product is Deslock+ which was launched in 2006. Desklock+ allows secure collaboration across complex workgroups and teams.
Kevin Percy, UK Business Development Manager for DESlock said that Insight can be very selective about its vendors and does not tend to pick any old riff raff.
He said it mades sense for Insight to be able to offer encryption as part of its portfolio, and give customers a fully integrated service.
There are a lot of advantages for the smaller British companies too. Insight has a fairly complicated business model which includes more services, expert technical resources, and a long supply chain which can give them access to services and products they might not normally get their paws on.
Insight made $5.3 billion in revenue last year and operated in 23 countries, serving clients in 191 countries worldwide.