The Death Watch for Hard Disk Drive Technology Begins Now (Finally!)

It tuns out if you look at Intel’s and OCZ’s new offerings, they’re inexpensive simply because they chintz out on storage capacity. Intel’s $125 SSD stores 40GB. OCZ’s sub-$100 SSD is 32GB. So the cost per gigabyte hasn’t really gone down – it’s still about $3/GB. At that price, that sub-$200 1 Terabyte Western Digital hard drive would cost you $3,000 using similar SSD technology.

But, this is still good news – excellent perhaps. Why? Because now we have what’s called a baseline price point. And that price point is $100. This is the price that the typical mainstream consumer is comfortable paying without feeling like they are paying a premium for a luxury good. Having the mainstream consumer on board means that manufacturers will be aiming at this price point for future generations of SSDs.

Another way of thinking about this is to look at past adoption curves. Many of the products that we see as universal today began as luxury items: high definition televisions, cell phones, etc. They all started off as slow sellers before they became hot sellers. But before they became big sellers, their prices had to drop to a point where the typical consumer would characterize as reasonable. For HDTV’s that was about $1,000. For cell phones, it was a bit more complicated since there’s both a purchase price and ongoing service cost components.

For SSD’s, it seems like $100 is roughly the baseline price point for mainstream consumers – at least that’s what manufacturer’s are hoping since it’s not exactly an easily calculable number, but rather one that’s based on a mix of psychology, marketing, and other aspects.

Now, for consumers looking at SSDs, the main question that they ask when looking for an SSDs will change. Up until now they’ve been asking “How much does an entry level SSD cost?” But now they can start asking, “How much storage do I get for a hundred bucks?” – the deciding issue changes from price to capacity.

Now, how to we get the quotation marks off of the “affordable?”

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