Of course, that is how it is being sold. But when it comes down to the real details, will it be a good thing for Seagate and Western Digital to own 90% of the hard drive market?
When there is less competition (and make no mistake, there will be less), the importance of Samsung’s production of quality drives, keeping the price of hard drives down, which has benefited everyone who buys HDDs, will certainly be felt.
The perfect analog is the graphics business. While you may say that there is vigorous competition there, a second look shows that the competition is only vigorous when the two competitors agree there should be. There are certain pieces which roll on at their own pace, never falling victim to the price drops which would normally occur if there were a third choice. The example I can think of immediately is the Radeon 4740 cards. Though they were surpassed in performance relatively early in their lifespan, they never were victim to the continued drops in price of other cards. The pricing stayed above $130 everywhere as nVidia had produced nothing to introduce competition, and AMD kept the numbers small all through production.
What happens when the two drive competitors decide that there is only going to be competition on certain models? The choice then, is to pay extra for what you want, or go with the price performers that they decide are good for you.
With one less drive manufacturer, there will be one less R&D unit working, so no matter what gains can be had through greater mass of production (which at the volume of any of the drive makers would be extremely small) will be more than offset by the lack of drive to work more performance into the product.
The article which gave the news of the purchase also gave a quote by a person from an independent group –
“I think there will still be plenty of competition between the three remaining players. Ninety percent of the market will be split pretty much evenly between Western Digital and Seagate, with Toshiba playing in some niche opportunities,” said John Webster, a senior partner at market research firm Evaluator Group.
What else might they say? No one is going to really stand up and state that most of the competition is gone, as only a small flurry would be needed to wipe that notion from the mind of the greater public, before getting back to agreed upon business practices and pricing.
There will be some changes coming, for sure. The price drops of drives, as they are superseded by larger ones, will proceed in a much more orderly fashion, as there won’t be any third party upstart, making the big two play nicely. Toshiba, as spoiler, won’t work. They don’t have enough of the market to force anything – not even in the 2.5” drive market.
Some may say that this is a reaction to the Western Digital purchase of Hitachi, but is is different in that Seagate was larger than Western Digital until the purchase, and was still not hugely affected by the addition, as the Hitachi numbers had dwindled since the company was known as an IBM business, whereas Samsung was getting to be a very big player, both in moving disk and solid state drives.
The sad part is that nothing can be done about this, as it is so very large (and multinational) that no oversight group can complain with any perceived effect.
Life is far from over for the hard drive buyer, but it is certainly going to change significantly.