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Hard drive shortage leaves dealers in a quandary

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DQW Bureau
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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.

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World-wide href="https://www.dqweek.com/wd-delivers-personal-cloud">Western

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.

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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.

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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.”

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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.

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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.”

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