The Price of Computer Components Is Going Up? (Part 1)

7/6/2012 5:38:25 PM

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.’

Description: The price of computer components is going up.

The price of computer components is going up.

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 feeling pinch?

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.

Hard Drives

Description: Hard Drives

a WD2002FAEX 2TB Western Digital Caviar Black

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.

Description: The answer is simple: 2011 saw some of Thailand’s worst floods ever

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 every level.

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.

  •  The Best Computers You're (Probably) Never Heard Of (Part 3) - Z88, Atari Falcon
  •  The Best Computers You're (Probably) Never Heard Of (Part 2) - Tatung Einstein, Camputers Lynx
  •  The Best Computers You're (Probably) Never Heard Of (Part 1) - Xerox Star, The Grundy NewBrain
  •  Embarrassing Bugs (Part 3)
  •  Embarrassing Bugs (Part 2)
  •  Embarrassing Bugs (Part 1)
  •  Simplicity: intuitive design, simple choices, and familiarity
  •  Retro - Cloud Computing
  •  Problem At Sony Corporation - Can Sony Stay Relevant In An Apple World?
  •  Tim Cook: “Of course, I'm going to change things.”
  •  Sign Language Technology (Part 3) - Seimens Hearing Aids
  •  Sign Language Technology (Part 2) - Why Was Sign Abandoned?
  •  Sign Language Technology (Part 1)
  •  How To Specify And Build A Media PC (Part 5)
  •  How To Specify And Build A Media PC (Part 4)
  •  How To Specify And Build A Media PC (Part 3) - Step-By-Step Guide
  •  How To Specify And Build A Media PC (Part 2) - Low-cost Streaming HTPC, High-End HTPC, Powerful Gaming HTPC Tower
  •  How To Specify And Build A Media PC (Part 1)
  •  HTPC Networking Consideration (Part 3) - Wireless Networking, Powerline To The Rescue
  •  HTPC Networking Consideration (Part 2) - Home Server & Wired Networking
    Most View
    Which MacBook Is Right For You (Part 1)
    Kobo Glo - Revolutionary ComfortLight Illuminates The Screen (Part 1)
    State Of The Art Standards (Part 2)
    Edifier E30 Spinnaker - By The Horns
    Thermaltake Cases Are Suitable For Everyone’s Budget (Part 3) : Thermaltake Commander MS-III
    Nokia 808 PureView – It Is All About The Photos
    Windows 8’s Anatomy (Part 4)
    ASP.NET State Management : The Application’s State
    Analysis iPhone Growth Strategy
    Motorola RAZRi - Excellent UI Skin
    Top 10
    Dell UltraSharp U2913WM - Unique 29-Inch Ultra-Widescreen
    Cloud Computing Reconsidered (Part 2)
    Cloud Computing Reconsidered (Part 1)
    Cloud Services - Which cloud? (Part 4)
    Cloud Services - Which cloud? (Part 3)
    Cloud Services - Which cloud? (Part 2)
    Cloud Services - Which cloud? (Part 1)
    Compliance & The Cloud (Part 2)
    Compliance & The Cloud (Part 1)
    Vizio CA24T-A4 All-in-One PC - Bringing The Sexy Back