Hard drive makers weaken warranties

Three of the major hard drive makers will cut down the length of warranties on some of their drives, starting Oct. 1, to streamline costs in the low-margin desktop disk storage business. PC makers have been pulling back the warranties on their computers in an effort to reduce costs, and hard drive makers Maxtor, Seagate and Western Digital are about to follow suit. The three drive companies, which combined have about 85 percent of the drive market, will alter their warranties from three years to one year. The changes will only be for drives sold for desktop PCs and some consumer-electronics products, which traditionally have one-year warranties or less, according to representatives from all three companies.

"We're following the trend in desktop PCs, where they've all switched to one-year warranties," said Stephen DiFranco, vice president of marketing at Maxtor. "This should have no effect on consumers because we hardly ever get returns in the second or third year and it frees up cash that we have to reserve to cover the warranties."

The companies will maintain three- to five-year warranties for drives used in large businesses such as banks and companies that keep track of financial transactions. Western Digital will offer extended warranties directly to customers, while Maxtor and Seagate expect retailers to have extended warranty programs for consumers. The move should have little effect on consumers, according to Dave Reinsel, an analyst with research firm IDC. However, the move emphasizes how hard drives are becoming more and more of a commodity as margins become smaller and smaller.

News source: C|net