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.