Why are External HDDs cheaper than Internal HDDs

[smitbret]

Just been cruising through HDD prices for the last few weeks and noticed that almost universally you can get an External HDD for less than the price of the same internal HDD. The kicker is that if you crack open the case for the external HDD, it's the same HDD as you would have purchased for more money had you bought it as an internal.

What is the thought process or methodology behind this pricing scheme?

 

[Eureka]

In the ones I've seen, it's usually not. You get a 5400 RPM drive in externals while you buy 7200 RPM drives for internal drives.

Also cases are cheap, and in bulk it's a relatively small cost for them to include it, especially knowing they will make it up in more sales.

 

[smitbret]

http://www.newegg.com/Product/Produc...82E16822178117 $129.00

or

http://www.newegg.com/Product/Produc...82E16822148844 $139.00

Same drive. I've particularly noticed it with Seagate, not so much WD.

Happens in the 2TB level, too. You can even get a 4TB external for about $180. The cheapest 4TB internal ia over $300. Just weird to me.

 

[Anteaus]

Assuming it's the same drive, I'd imagine the prices are driven by the same engine that drives most things, supply and demand. Considering that most products are sold at prices well above manufacturing and PR costs, how much they sell for is generally as high as the market will bear and can be arbitrary.

More often than not the drives are not equal and the external version are slower or low power versions. Also, the drives may come with different firmware to optimize use as an external.

One could jump to the conclusion that they could save money by retasking an external drive to an internal environment, but personally I wouldn't do it. I'm not saying you'd have any problems, but these drives were chosen for external use and there is no way to know what factors they might have used to bin them.

 

[corkyg]

They don't appear to be the same drive. They are the same size, etc., but different quality. One is STBV3000100 and the other is ST3000DM001, The bare drive is their top of the line, Barracuda series. Analogy? WDC Blue vs WDC Black.

 

[ImpulsE69]

I bought a couple 3TB external drives for $99 before the prices shot up and took them out of the cases and into the desktop no problem. Best $200 I'd spent in awhile The same drive internal was $50 more

 

[smitbret]

Yeah, I had thought about breaking open some externals but the extra $10 is worth having a warranty and the possibilty of having a better drive.

 

[smitbret]

Yeah, I had thought about breaking open some externals but the extra $10 is worth having a warranty and the possibilty of having a better drive.

 

[C1]

They don't appear to be the same drive. They are the same size, etc., but different quality. One is STBV3000100 and the other is ST3000DM001, The bare drive is their top of the line, Barracuda series. Analogy? WDC Blue vs WDC Black.

Ya, for example just the other day I was eyeing a 2.5" WD Passport 320GB external on Craigs List just for the bare drive (hoping it would be a BEVT inside). However, found a YouTube that demonstrated opening this model up and out came a BEVS variant instead of a BEVT. Search shows BEVSs (at least more often than not) statused as "Recertified". Note: This is not the same as "Refurbished". Refurbished WDs specify that on the HDD's cover label.

 

[blastingcap]

From what I understand, HDDs have different grades like almost every other semiconductor-based product. CPUs are binned. GPUs are binned. Why not HDDs, at least on a mechanical basis even if the platters are identical? So the lower bins go into external drives as they are assumed to not be worn and torn as much as internal HDDs.

 

[Mfusick]

They don't appear to be the same drive. They are the same size, etc., but different quality. One is STBV3000100 and the other is ST3000DM001, The bare drive is their top of the line, Barracuda series. Analogy? WDC Blue vs WDC Black.

Same drives basically.

 

[MrX8503]

Bought a 2TB WD external for $70 pre flood. When I cracked it open it was a 7200 rpm Black!

 

[Ketchup]

I think it was the flood. More people are buying externals for backup right now, so that market is more competitive, and those prices are coming down faster.

I believe internals will continue come down in price, just will take a longer amount of time.

 

[zephyrprime]

They don't appear to be the same drive. They are the same size, etc., but different quality. One is STBV3000100 and the other is ST3000DM001, The bare drive is their top of the line, Barracuda series. Analogy? WDC Blue vs WDC Black.

Those are product numbers but the drive inside the external might still be the same drive. May people have in fact opened up externals and found them to be the same drive as internals.

Also, if there were binning in affect for drives, then the externals should be the getting the higher quality drives because externals have to deal to with physical shocks and higher temps than internals. Therefore, externals would be more expensive. I highly doubt that there is binning for externals though.

The real reason is because of what economist call "price discrimination". Basically, external drive buyers are dumber and less demanding customers. Internal buyers are smarter and more discerning. Therefore, even though the drive inside is exactly the same, you can charge the person buying an internal drive more.

Looking at alibaba, the price of an external enclosure is about $3 without power supply. So the price of an enclosure is not inconsiderable given the retail price. But the demand gap between the internal and external drive consumers is so great that it can bridge that gap. The demand difference must be roughly ~$16-$26.

 

[zephyrprime]

I think it was the flood. More people are buying externals for backup right now, so that market is more competitive, and those prices are coming down faster.

If more people are buying externals, that would make them more expensive. There is not more competition in the external market. There are the same number of drive manufacturers producing the same number of models of drives.

 

[Ketchup]

If more people are buying externals, that would make them more expensive. There is not more competition in the external market. There are the same number of drive manufacturers producing the same number of models of drives.

Um, no. Competition makes prices go down, not up. Internal hard drives are still high because the flood has people thinking that the prices are going to be inflated forever. Eventually, the competition will drive the prices down to where they should be, like it has done with externals.

 

[blastingcap]

Also, if there were binning in affect for drives, then the externals should be the getting the higher quality drives because externals have to deal to with physical shocks and higher temps than internals. Therefore, externals would be more expensive. I highly doubt that there is binning for externals though.

I didn't believe it at first either, but that's whatI've heard, and it makes sense. The binning would go the other way around--they know most people don't use external drives much so it's better to skimp on those than on internal drives that may be used a lot more often.

 

[funnymoney]

Um, no. Competition makes prices go down, not up. Internal hard drives are still high because the flood has people thinking that the prices are going to be inflated forever. Eventually, the competition will drive the prices down to where they should be, like it has done with externals.

Yep, i love the competition because i wanna cheaper HDDs.

 

[vshah]

i read somewhere - forget where unfortunately - that hdd manufacturers have the equivalent of cpu binning for hard drives. the lower quality drives end up as externals.

 

[Carson Dyle]

Just been cruising through HDD prices for the last few weeks and noticed that almost universally you can get an External HDD for less than the price of the same internal HDD. The kicker is that if you crack open the case for the external HDD, it's the same HDD as you would have purchased for more money had you bought it as an internal.

What is the thought process or methodology behind this pricing scheme?

Good question. I've noticed this too with many 2.5" drives. I think there are a number of factors:

1. The externals are consumer products, where price is more market-driven. It means that Newegg and other online sellers are selling these drives in competition with the likes of Best Buy, Walmart and Target, unlike OEM drives.
   
2. These retail drives often have shorter 1 year warranties, vs. 2-3 year warranties on the same drive sold as OEM. Those shorter warranties lower the overall cost of the drives to manufacturers.
   
3. Manufacturers dump EOL drives by selling them within external enclosures. Western Digital, especially, which doesn't change model numbers when they move to higher density, few platters. This is a cheap and easy way to unload obsolete inventory.

 

[zephyrprime]

Um, no. Competition makes prices go down, not up. Internal hard drives are still high because the flood has people thinking that the prices are going to be inflated forever. Eventually, the competition will drive the prices down to where they should be, like it has done with externals.

You misread me because I never said that competition makes prices go up. What I said was that increased demand makes prices go up.

What you say about the flood would affect external prices too so that still doesn't explain why externals are cheaper than internals.

 

[smitbret]

Good question. I've noticed this too with many 2.5" drives. I think there are a number of factors:

1. The externals are consumer products, where price is more market-driven. It means that Newegg and other online sellers are selling these drives in competition with the likes of Best Buy, Walmart and Target, unlike OEM drives.
   
2. These retail drives often have shorter 1 year warranties, vs. 2-3 year warranties on the same drive sold as OEM. Those shorter warranties lower the overall cost of the drives to manufacturers.
   
3. Manufacturers dump EOL drives by selling them within external enclosures. Western Digital, especially, which doesn't change model numbers when they move to higher density, few platters. This is a cheap and easy way to unload obsolete inventory.

This makes a lot of sense

 

[Ketchup]

You misread me because I never said that competition makes prices go up. What I said was that increased demand makes prices go up.

What you say about the flood would affect external prices too so that still doesn't explain why externals are cheaper than internals.

Sorry for the misread.

 

[hernanc]

Guys, my take is that in the retail industry inventory turnover is king and equals better prices. This is true for most items: car parts, food, etc. and even more for the technology market where product cycles are shorter.

Bye, HC

 

[Carson Dyle]

I question whether external drives have greater inventory turnover than OEM drives. I could be wrong, but I would think overall OEM sales dwarf those of external retail drive sales.