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HDD price hike slows SIs' business

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DQC Bureau
New Update

The recent hike in HDD prices have pushed customers to postpone  their buying

decisions, adversely affecting small SIs doing business on  wafer-thin margins. SIs

allege that HDD vendors are in connivance with their  star partners to create an artificial shortage and subsequently hike

prices.

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"This appears to be a planned move," says one SI who wished to  remain anonymous. "HDD vendors and their partners have teamed up to fool

end-customers. This will only tarnish the reputation of the  so-called HDD giants," he adds.

According to sources, HDD sales were at their lowest during the  month of

December and hence, vendors and select dealers have found this  'smart move'

to create an artifical shortage by stocking HDDs and jacking up  prices.

"Otherwise, there is no reason as to why the prices should go up,"  says a

source. 

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Some partners have attributed the price hike to a possible shortage  of HDDs

soon in the international market, and that could happen because of  the financial crisis

a HDD head manufacturer Read-Rite Corporation of  USA is going through.

However, assemblers are calling these reasons as an eyewash to  support the

price hike. Market sources say that vendors and select dealers have floated a roumor

that there will be a shortage.

"We lost our orders just because of the hike," says one assembler  adding,

"if we execute the order, we will have to bear the price differences  in the

market."

The hike in prices are being observed in only the leading brands  like Samsung and Seagate. In fact, the prices of competing products like

Maxtor and Western Digital have not seen an increase. Some assemblers are planning

to shift to brands like Maxtor or Western Digital, if the high  prices continue for in Samsunga and

Seagate HDDs.

NELSON JOHNY

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