James Hunt investigates current pricing
trend and asks how you can get the best deal on computer parts.
Spending money on computer components is
always rewarding. Your games become more fun, your work becomes more
productive, and you can switch on your machine every morning knowing that you
put it together with your own hands. But there’s a dark side – one we’ve all
experienced. As soon as you hit the ‘buy’ link on a web page or hand your cash
to an assistant, it’s only a matter of time until it happens: eventually prices
are going to drop, and you’re going to wonder if you should have waited just
that little bit longer before pulling the trigger on your purchase.
‘Something odd is happening: the price of computer
components is goingup.’
The price of computer components is
At least, that’s how it used to be. These
days, something odd is happening: the price of computer components is going up
– not just in relative terms but in actual monetary terms as well. A lot of the
time, the money you spend today goes no further than it did a year ago. In some
cases, it actually buys less than it did. It’s not necessarily a total
surprise; with the world economy in financial turmoil, the problems are
reflected everywhere, from the food on our tables to the cars we drive. Why
wouldn’t you expect to find that the global business of computing is also
Placing the blame on such nebulous wording
as a weak economy’ is a rather superficial way of looking at it, though. The
truth is that there’s a wide variety of economic problems facing computer
component manufactures, which are contributing to pricing difficulties. Weak
currencies in the West.Companies going out of business entirely. Rising
material costs. It all adds up.
And the problems aren’t just due to
economic factors; there are also environmental and social issues in play.
There’s greater consumer interest in acquiring the latest technology, not just
in Europe and the US, but in economically developing continents such as Asia
and South America. Increased demand is good for business, but helps to feed
material shortages, which in turn drives up cost. The introduction of better
controls on working conditions in countries like China is turning formerly
inexpensive component manufacture into a more expensive business. And a flurry
of natural (and occasionally unnatural) disasters in countries like Thailand
and Japan mean that technology giants are simultaneously- spending more on
repairs, rebuilding and insurance while slowing their outputs.
Combined with the fact that much of the technology
we use in starting to approach its physical and practical limits, we’re forced
to conclude one thing: in 2012, we’re being asked to pay more money for
technology that isn’t improving as fast or as definitively as it once was.
In this article, we’ll compare today’s
prices with those of the recent past, analyse the major factors affecting
component prices, and see what, if anything, has changed. As an added bonus,
we’ll tell you how and when you should spend your money so that you can still
be sure to get the best bargains even in the face of rising costs.
a WD2002FAEX 2TB Western Digital Caviar
The price of computer storage has,
historically, plummeted year on year. The longer you’re used computers, the
more gob-smacking the pace at which storage has improved seems to be. So why,
in 2012, are hard drives more expensive than last year? Finding an example
isn’t hard. In May 2011, a WD2002FAEX 2TB Western Digital Caviar Black cost
US$160. In May 2012, it costs almost $270. A 1TB Seagate Barracuda ST31000524AS
cost $65 in May 2011. Now, It’s $99, down from a high of $150 in December last
year. What’s causing this?
The answer is simple: 2011 saw some of
Thailand’s worst floods ever. Floods that, in some cases, lasted for six months
and persisted until January 2012. Needless to say, recovery takes time. The
World Bank estimates that the disasters cost the Thai economy almost $50
billion, and more relevantly for us, it substantially affected the production
of hard drives.
The answer is simple: 2011 saw some of
Thailand’s worst floods ever
That’s because Thailand is the world’s
second largest producer of hard drives, responsible for 25% of all units
produce. The floods damaged several of Western Digital’s factories, as well as
those of other manufactures, and difficult reconstruction conditions have led
to a global shortfall in the supply of new hard disks, driving up prices on
More expensive wholesales prices also mean
that there are fewer bargains and sales, as well as restrictions on bulk
purchases. Some retailers are preventing anyone from buying more than one hard
drive at a time. Luckily for storage enthusiasts, this is a temporary blips in
the overall trends, and barring any further disasters, the market should return
to normal by the end of this year. It’s already starting to slide downwards.
Finding bargains under the current market conditions, then, requires you to
have one of two things: persistence or patience. Buying hard drives now means
you may struggle to get any truly amazing deals. If you can wait, you probably
should but, on the other hand, if you do see retailers advertising discounts on
hard drives, snap them up, because it’s going to be a while before they become
a regular fixture again. Prices aren’t going to get back to normal for a few
months yet, and that means taking bargains wherever you see them.