As all facets of technology begin to transition from mechanical devices to solid state storage, industry experts expect the cost of these devices to fall with economies of scale. But is this really the case? Our analysis of retail solid-state disks (SSDs) reveals that only a small portion of the industry is benefitting from new competition, while high densities have actually gone up in price per gigabyte over the last year.
Using our proprietary web extraction technology, we collected the cart price of all SSD drives available at top tier ecommerce merchants, updated multiple times per day, through the course of 2010. We define top tier merchants as vendors that have greater rating than an 8.0 on resellerratings.com and carry their own inventory.
We segmented all SATA SSD hard drives available in the United States into three categories: high density, mid-density and low density. For 2010, we defined all drives under 100GB, inclusive, as low-density. 100GB to 200GB exclusive marks the mid-range and all devices of 200GB or higher the high-density. All drives were classified by their box description, as opposed to the post-formatted size.
All classes of NAND technology were subsequently combined for the purpose of this analysis. That is to say, we treated SLC and MLC technology the same. Our data included 9 manufacturers over 185 separate SKUs at 83 online merchants for the 366 day period from January 27, 2010 through January 27, 2011.
We first determined the number of buy pages for all SSD products per segment. That is, we counted the number of occurrences of each individual product at each merchant. Refurbished and bundled kits were omitted from this set. The number of placements quadrupled across all segments in 2010.
Using the industry standard practice of calculating the cost per gigabyte, we then averaged the cost per gigabyte per day, per segment. As low-density devices began to saturate the market in 2010, per-gigabyte costs fell more than 40% from $7.80 per gigabyte to $4.34 per gigabyte.
Despite the generally accepted maxim that greater competition will reduce prices in the marketplace, Dynamite Data discovered that the price per gigabyte took a significant increase at higher densities.
Relatedly, the price per GB for mid-density SSDs has remained nearly flat over the same period, while high-density SSDs have actually crept up in price per gigabyte by more than 60% since the beginning of last year, despite an increased penetration of their products in the marketplace as more manufacturers and online merchants enter.
While it is unclear what is driving this trend for high-density SSDs, the dramatic fall in price for the low density products is likely compressing margins and creating an increasingly commoditized market. Those who have a cost advantage in resale or manufacturing may find an opportunity for increased revenue by moving farther up market where prices appear to be falling less quickly (or not at all).
About Us:
Dynamite Data delivers the most comprehensive and timely ecommerce data in the world on technology and consumer electronics. Our proprietary web extraction technology monitors current pricing and product availability data on almost nine million products across more than 600 U.S. and International online merchants. Over the last four years we have assembled a database of more than 140 million actual buy pages and we continue to extract and update tens of millions of buy pages each day. Accurate current and historical price, availability and other key competitive information is delivered to our customers through our SaaS Channel Monitor dashboard interface or through our API feed directly into their business intelligence systems. Our customers include hard-drive and semiconductor manufactures and some of the largest and most visible e-commerce retailers in North America. Contact us today to find out how we can help take your business to the next level: sales@dynamitedata.com.
