Some (bad) news about Hard Drives.

 
The Hard Drive world has seen a lot of action lately.

When inventory levels plummeted 90 percent in less than a week after the Thailand flood in October, the top-selling hard drives on Newegg.com and Tigerdirect.com went up anywhere from 50 up to an absurd 150 percent. Over the past few weeks, Hard Drive prices are finally starting to drop, and the trend should continue throughout the year until supply meets demand sometime around Q3 2012. AppleInsider did a fascinating analysis on this topic by extrapolating MacBook Pro pricing.

On related news, Apple is apparently in the process of acquiring Anobit, which makes chips that greatly increase the performance of flash memory on devices like the iPhone 4S.

Seagate Technology completed the acquisition of the hard disk drive business of Samsung Electronics for $1.4 billion in stock and cash. The deal was approved in Australia, China, and the E.U.

In 2010, HDD shipments from both Seagate and Samsung represented 40 percent of the HDD market. Western Digital and Hitachi Global Storage Technologies still held the number one position with a 50 percent share. Western Digital intends to buy Hitachi Global Storage Technologies for $4.3 billion in cash and stock and the acquisition is expected to be finalized by March.

The mergers are not good for photographers, filmmakers, and any creative relying on desktop hard drives. With Western Digital’s acquisition of Hitachi, and Seagate’s acquisition of Samsung’s segment, the two companies will control approximately 90% of the market.

As an early demonstration of the risk of monopolization, starting this week, both Western Digital and Seagate decreased the length of warranty periods (from 3 years to 2 years) on “consumer” hard drives in order to reduce costs and push more money back into product development. Western Digital is planning to offer an optional, paid, extended warranty following the “Apple Care” business model. Here is the FAQ for Western Digital’s new warranty policy, and the warranty period per region. Seagate is even more aggressive decreasing the 5-year warranty on some hard drives to 3 years and even 1 year for models like Barracuda Green and Momentus. Remember that all hard drives, regardless the brand and model, will die. It’s not a mat­ter of if but when. So warranties are important.

What can we do? First, we should voice our concerns (like I am doing now writing this post). Second, buy only from companies who make great hard drives AND stand behind their products like G-Technologies (the G-DRIVE Mini 500GB was my first purchase of the year). And third, beware of those “too good to be true” hard drive deals. You might be just buying a cheap nightmare.

UPDATE: 0803 “Seagate completes purchase of LaCie in quest to become king of the hard drive hill”