India unaffected by component shortage Seagate HDD shortage shoots up prices by 15%

Rajitha Saleem
New Delhi, Sep 13

India seems to be least affected by the shortage of components
that the international market is experiencing. All components except Seagate
hard disks and Intel CPUs are easily available in the market. Demand for
components has gone up as many companies are buying heavily in the Christmas
quarter internationally and because of the need for business requisitions to be
wound up.

“The demand has gone up in the Asia Pacific region this
year because of the Internet boom. In India especially, with the onset of many
free ISPs, there has been an upward trend in the buying habits for PCs,”
said Rajesh Kullar, Country manager, ACI Infotech Ltd, which distributes Seagate
HDDs.

The hard disk segment has been the most affected with the
Seagate hard disks in acute shortage. According to Kullar the Nehru Place market
has also been experiencing a shortage of Intel CPUs–PIII 550 and 500 for the
last six months and would experience a shortage of 810 chipset motherboards by
the end of this month.

In the case of Seagate, it seems to be an annual phenomena with
the October-November months of the Christmas quarter experiencing the acute
shortage of hard disks for the last few years. The shortage happens especially
when Seagate is doing a revamp of its hard disk capacity and introduces the
upgraded one. This time, the company had introduced 20 GB HDD six months ago,
and has gone ahead with making it the entry-level hard disk. Currently, the
Nehru Place market is experiencing an acute shortage of both 10 GB and 20 GB
hard disk in tune with the international shortfall.

“It is a strategy of Seagate for making the 20 GB the entry
level HDD. They have reduced the price of the new entrant to the extent that
there is no big margin between 10 GB and 20 GB,” said Ramesh Jain, CEO,
Marks Marketing Pvt Ltd, a reseller of Seagate.

The 10 GB HDD is available at a rate of Rs 4,200 and the 20 GB
at Rs 4,800 (plus-minus Rs 100), thus reducing the margin between them to as low
as Rs 500 to 700. The shortage is there from the last few weeks with the acute
shortage being effected in the last few days. Dealers are expecting acute
shortage to go on for a few days more, after which the situation is expected to
ease up a bit, but the problem will remain till November.

On the other hand, according to Kullar, the hard disk shortage
is part of the worldwide component crunch in the IT market. “The prices in
the Indian market will go up by 15 percent in accordance with the worldwide
increase for all components.”

Said Ashok Taneja, MD, Softech Computers Delhi Ltd, “It is
because of the high demand that Seagate disks are in at this quarter of the year
that there is the shortage. And as a result, the prices have gone up by five
percent.” According to market analysts, Seagate has been pushing the new
HDD to alleviate the defective lot of 8.5 GB hard disks, which had a whopping
rejection rate of 50 percent.

But there are dealers who wish to differ on this aspect in Nehru
Place. According to PK Sharma, CEO, Comnet Vision India Pvt Ltd, the shortage
has been artificially created. “It is the dealer-distributor and Seagate
nexus, which results in all this fracas in spite of the hard disks being there
and prices being normal.”

The Seagate hard disk shortage leaves the plank for its
competitors–Samsung and Quantum–to capitalize on. But the dealers are
skeptical about the prospect. “Quantum is not aggressive enough to capture
the opportunity and to overpower the high esteem which Seagate enjoys among the
customers,” retorts Sunil Gupta, CEO, Challenger Computers Ltd. Besides,
“Quantum does not feel the need to build new strategies as we do not feel
the shortage of Seagate is something to be capitalized on,” explained a
marketing executive at Quantum.

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