For personal use only. From Computer Reseller News.
August 31, 1998, Issue: 805
Section: News
Hard-drive shortage: Real or cyclical?
Joseph F. Kovar
Irvine, Calif. -- Is the industry facing a desktop hard-disk-drive shortage, or is it merely entering a
yearly ritual of tight supply?
Hard-drive vendors, after suffering several quarters of oversupply and falling prices, could benefit
from shortages of any degree but agree supplies are tight because of seasonal and product transition
issues.
"Now we're seeing the typical ramp-up going into the third quarter," said Roger Katz, director of
marketing in the DPSG Division of Quantum Corp., Milpitas, Calif. "But it's too early to tell . . . if
this is a typical quarter or not." Quantum's inventory is low to average, he said.
Supply is a concern, said Ken Oberman, vice president of mobile and desktop drives at Fujitsu
Computer Products of America Inc., San Jose, Calif. "Supply is very tight and will stay that way
for the rest of the year," he said. "I don't want to say 'allocation,' but every drive we make is
getting shipped. There is no excess inventory."
Oberman said OEM demand has soared, especially for 2.5-inch portable drives. "Is our ability to
support everyone not keeping up with demand? Yes," he said.
Certain capacity points are hard to get, said John Burger, vice president of marketing at Western
Digital Corp., Irvine, Calif. "Two-gigabyte drives are in allocation because many manufacturers
have quit [making] this product," he said.
The tight supply is due to increased demand coinciding with transitions to new product families,
said Katz. "[These transitions] are pretty painful for everybody involved," he said.
The move to new technology is a "normal phenomenon," said Jim Porter, president of Mountain
View, Calif.-based Disk/Trend Inc.
Several vendors just announced 3.2-Gbyte-per-platter drives, he said. "There's always short
supply in the first 25 percent of a product's life cycle. In the last half of the cycle, there are too
many drives," he said.
Expect a strong aftermarket for the rest of the year, Porter said. "A lot of PC makers are pushing
poorly equipped sub-$1,000 PCs. . . . Then a lot of people realize they need more drive space than
they have. When the sub-$500 PCs hit the market this fall, it will happen again."
Distributors are feeling the pinch. SED Electronics Inc., Atlanta, recently blamed shortages of
4.3-Gbyte drives, in part, for its recent fiscal losses.
Fujitsu, IBM Corp., Quantum and Western Digital also are experiencing a shortage of 4.3-Gbyte
and similar drives, said Dave Nebbia, commodity manager for storage devices at Real World,
Andover, Mass. Some drives are on 30 percent to 40 percent allocation, he said.
IBM canceled this week's Blitz Day, an event in which the Armonk, N.Y.-based company offers
small OEMs as well as distributors and VARs special prices for one day only, said Nebbia. IBM
could not be reached for comment.
The tight supply is having little effect on resellers.
"When something goes into a shortage like that, customers can usually use something else," said
Chris Manteria, sales manager at Nexus Systems, a Farmingdale, N.Y. based distributor.
Any shortages appear to be a rumor, said Mark Pace, vice president of technology at Action
Systems Inc., Belmont, Calif. "For desktop IDE drives, there's no brand loyalty," he said.
An out-of-stock hard drive never stopped a sale, agreed Jason Windsor, owner of Dreamachine,
Everett, Wash.
HD Systems Inc., Santa Clara, Calif., has so many resources that "99 percent of the time, we get
what we want," said company President Paul Hsu.
Copyright r 1998 CMP Media Inc. |
