CES 2012

At CES Seagate boss Steve Luczo said the company was considering running open market auctions of its disk drives to gauge spot prices and demand.

Luczo was talking at an informal investor event attended by Stifel Nicolaus' Aaron Rakers, who wrote that Seagate could run the auction events itself or hire a third party to do it. Auction experimentation could happen in the near-term, meaning weeks or a few months. Such a selling method could introduce increased volatility into the HDD market at a time when supplier consolidation is encouraging greater price stability.

Rakers also notes Seagate mentioning that Thai flooding and drive head shortages had pushed forward its introduction of 2.5-inch 500GB/platter and 3.5-inch 1TB/platter technology.

The second quarter should see 500GB/platter 2.5-inch drive shipments to its OEMS with a ramp up in volume in the third quarter. This will reduce the component count in drives as fewer platters and heads will be needed to reach the capacity points of currently shipping drives, which will lower Seagate's costs. ®