Hard drive shortage hurts Intel, but Apple is the 'least impacted'
Intel's results are expected to be below the company's previous projections due to the continued shortage of hard drive supply. The chipmaker lowered its fourth quarter revenue to $13.7 billion, down from $14.7 billion.
Analyst Ben Reitzes with Barclays Capital said Intel's revisions should not be a surprise to those who watch the PC market. But while major PC makers like HP and Dell expect to be negatively impacted by the hard drive shortage, Reitzes said he believes Apple will not be hurt by hard drive supply constraints.
"We think Apple will be the least impacted of our PC coverage names, if at all, given its ability to sell MacBook Airs and iPads," he wrote in a note to investors.
In what may have been the first sign of the hard drive shortage affecting Apple, earlier this month build-to-order iMacs with 2-terabyte hard drives saw their estimated shipping times slip to 5 to 7 weeks, significantly longer than their previous shipping estimate of 1 to 3 days. Those shipping times improved last week to 2 to 4 weeks, suggesting supply of the high-capacity 2-terabyte hard drive has improved.
Apple Chief Executive Tim Cook was asked in October about the hard drive shortage, which is a result of flooding in Thailand. At the time, he was unsure how the situation might affect Apple.
"It is something I'm concerned about," Cook said. "We do expect — I'm virtually certain there will be an overall industry shortage of disk drives as a result of the disaster. How it affects Apple, I'm not sure."
About 14,000 factories were shut down by the floods in Thailand, putting more than 600,000 people out of work. Among the companies affected by the natural disaster were hard drive makers Western Digital and Seagate.
16 Comments
Better ship times could be the result of not only increased supply but also reduced demand, right? isn't the whole supply and demand the equation exactly what we are talking about here?
And what about unit sales or stock levels? I know lots of companies have just in time supply chains. but maybe Apple already had some qty on a truck before the constraint occurred.
I hope this pushes flash drive prices even lower. It's 2012, Flash storage should be a standard.
I hope this pushes flash drive prices even lower. It's 2012, Flash storage should be a standard.
Extremely sad about the flooding in Thailand.
But yes, flash storage is just another transistorized microcircuit. Thus Moore's law applies to flash storage: "...the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years." At some point flash drives will be cheap enough to replace all internal hard drives. And external hard drives will be so big that you won't need very many. Just one 1 petabyte drive per household for wireless backups, and another 1 petabyte drive to back that one up. Done.
Apple shocked the industry by not including a floppy drive on the original iMac.
They shocked the industry by not including an optical drive in the MacBook Air.
They'll shock the industry again in a few years by eliminating hard disk drives from all Macs.
Hard drives in Apple MacBook Pros and Mac minis are almost always from Hitachi, Toshiba, or Seagate. I don't know about iMacs. I don't think Western Digital or Samsung supply many hard drives to Apple. Of the major manufacturers, Western Digital was the one most affected by Thailand floods, Seagate the least. I don't know about Hitachi (to be acquired by WDC) or Toshiba.
Assuming Apple had good long-term supply contracts in place with Hitachi, Toshiba, and Seagate, I can see how it would not be affected much. The Thailand issues should be resolved in 3 to 6 months anyway. WDC has already said that they will restart production earlier than expected.
At some point flash drives will be cheap enough to replace all internal hard drives.
Flash drives may soon replace hard drives because people don't need such big drives on portable devices, but not because they become as cheap as hard drives. I bought a 3TB hard drive in April for $150, which is $.05/GB. The cheapest flash drives are about $1/GB, which is 20 times more expensive per byte. Of course, ten years ago flash was 100 times as expensive as disk.