Heavyweights cut hard-drive cover

By PETER GRIFFIN

The three largest hard-drive makers, Maxtor, Seagate and Western Digital, have colluded to reduce certain warranties from three years to 12 months.

Desktop models sold by the three competing companies will carry reduced warranties from today in a move that will have most impact on systems integrators buying hard drives in small quantities to build white-box PCs to order, and PC owners upgrading to larger hard drives.

The manufacturers claim that improved hard-drive technology means only a fraction of hard drives fail and hardware margins have been squeezed to the extent that offering three-year warranties is not cost-effective.

PC Company marketing director Kerry Mancer said players in the New Zealand industry had little choice but to accept the change.

The PC Company would face greater risk in offering extended warranties not in-turn met by suppliers, but that situation already existed for other components such as monitors, disk drives and processors.

The PC Company would continue to offer a basic one-year parts and labour warranty for desktops, extendable to three or five-year terms for added fees.

The large multinational PC vendors such as Hewlett-Packard and Dell generally offer standard one-year warranties for desktops.

"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," said Maxtor's vice-president of marketing Stephen DiFranco.

The change will not affect specialised commercial hard drives used by banks and large data users, but it comes as hard drives are integrated into a wider range of electronics products.

Microsoft's gaming console, the Xbox, released in New Zealand tomorrow, has a built-in 8Gb hard drive.

The reduction is another signal of the tough times hard-drive manufacturers are facing.