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Hard drive prices is
expected to double in the Indian open market and is likely to affect
the PC business for both partners and vendors.
The impact is already
visible in the assembled PC business, and branded PCs to get affected
shortly as two major Indian players; Western Digital and Seagate,
have increased the prices globally due to the floods in Thailand.
Majority of the production plants have shut down affecting the hard
drive market globally.
According to iSuppli, a
component research agency, Seagate and Western Digital accounts for
two-third of the total shipment of hard drives globally. In India
too, these two hard drive manufacturers dominate the market.
World-wide
Digital
(WD) said in a press release that the company ships 60% of its hard
drive units from Thailand and the flood in the company's supply chain
division is likely to have a significant impact on the company's
overall operations and its ability to meet customer demand for its
products in the December quarter. WD was not available for a comment
on the impact in India.
On the contrary, Seagate
has other plants in Malaysia, Singapore and China operational, but
the impact was unknown as Rajesh Khurana, country manager, Seagate,
India and Saarc, officially declined to comment anything on this
issue. While the distributors observed a little impact though unclear
about the future business.Manoj Gupta, MD, Fortune Marketing, one of
the leading distributors of hard drives said, “Till now, the Indian
picture is is not very clear as Seagate hard drives are also shipped
from its production plants outside Thailand. But the impact is
evident and the vendors does not commit on any of its functionality.”
Recently, weakening of
rupee has pushed major vendors to hike IT products in India; further
escalating the problem for dealers, hard drive crisis comes in
picture . Locally assembled desktop business is expected to slow down
due to the current shortage.
Mitesh A Jain, proprietor,
RT Computers and Services, Hubli, said, “Since it was a festive
season, many dealers in the market absorbed the price hike of hard
drives, but none would be able to retain it further. Already due to
strengthening of dollar prices, assembled desktop market is impacted.
Sooner it will affect assembled PC market. After the festive season,
sales of branded laptops or desktops vs assembled desktops was in the
ratio of 4:1.”
He further added, “A
Seagate hard drive of a certain confi guration which used to cost Rs
1,800 is now costing Rs 3,850. The hard drive market will take some
time to come back to its normal price.” Another partner from
Bengaluru, Mahendra Baid, owner, Mega Compuworld shared similar
thoughts. He said, “Already the market is running 60-65% short of
supply and therefore the prices are high. After re-correction of
prices vendors are likely to increase it by 100%. In a period of 10-
15 days the whole hard drive market has turned upside down.”
Vendors have also started
to realize the impact of the exceptional situation.
Acer, a significant PC
maker in India also seems to get impacted. S Rajendran, chief
marketing officer, Acer, raised sentiments about the situation,
“Unfortunately this is a very unprecedented situation and there is
no respite. Supply chain is badly affected. In the open market, the
impact is already seen in terms of short supply as well as high
prices.”
He further added, “There
is no big inventory in the market as of now and vendors will start
seeing the impact by mid- November. Definitely Acer would increase
the price but now I am unable to gauge the extent of it.”
On the other hand LG's
market also seemed disrupted. Sanjoy Bhattacharya, marketing head,
product group, IT business, LG said, “LG mainly operates with
regional distributors and there is a very thin line of stock. The
prices have been going upwards since the rupee depreciation and will
continues due to current hard drive problem. It will also impact
shorty on our PC business, as there will be an increase of around Rs
2,000- Rs 2500.” He also added, “In international markets the
effect is low as there is supply of hard drives but in India there is
a shortage as well as hike in prices. One of the reasons is that few
businesses practice unethical trade and therefore this is an
artificially created shortage in the open market.”
DISTRIBUTORS HOLDING
THE HARD DRIVES
After the hard drive price
upsurge, dealers across South are accusing the distributors for the
unethical business practiced by them. Speaking to The DQ Week, John G
Kotara, State PRO, All Kerala IT Dealers Association(AKIDTA said),
“Business is really going bad as distributors are holding up the
stocks. They imported large number of hard drives and now they are
marketing it. Basically they are tampering the older prices and
selling it in hiked rates.”
Dealers in Kerala said
that they are willing to pay the price after Thailand problem but the
distributors shouldn't cheat upon them. The dealers are ready to give
higher prices if the distributors produce current MRPs products.
Pointing out similar
problems, Toshy Mathews, President, AKIDTA-Ernakulam District said,
“As we know, due to Thailand calamity, hard drive prices have
increased. We firmly believe that sub—distributors and distributors
have stocked up the goods and currently working in tandem to sell on
a higher price. AKIDTA has also called upon a meeting to discuss the
problem and send intimates to the vendor companies."
Disagreeing to the
accusation one of the managers in Redington, a source on the basis of
anonymity said, “ The prices are high but I completely refuse the
allegations put by the dealers. We cannot stock the goods in a very
short period of time and therefore there is no question of tampering.
It suddenly seems to be the case of misinformation.”