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The holiday deals out here for external storage almost seem too good to be true, particularly if you have purchased storage devices for a decade or more. We have commented on this trend throughout the years, but the plummeting cost of external storage is just on an amazing trajectory toward zero. This puts the near-duopoly of Seagate Technology PLC (NASDAQ: STX) and Western Digital Corporation (NASDAQ: WDC) on a path that you just have to wonder how they can keep cranking out more and more storage devices at cheaper and cheaper costs and keep making so much money.

Amazon.com has sent out its pre-Black Friday holiday specials showing the Seagate Backup Plus 3 TB USB 3.0 Desktop External Hard Drive is available for $139.99 rather than the $179.99 normal price. It used to be impressive when just 1 TB of storage was breaking the $100 mark. Now 1TB is being offered (new, not used) for only $83.99 for the Seagate Backup Plus 1 TB USB 3.0 Portable External Hard Drive. Best Buy has a 1TB drive for only $79.99, a 1.5TB drive for $89.99, and even a 2TB drive for $99.99.

It was amazing when you could buy even 1TB of external drive storage at under $100, but now you can buy 2 TB of external storage with a $100 bill. If this keeps up you will get 3TB for $100 by this time next year. The cost of 1TB storage was many times this amount just a few years ago.

Western Digital is worth $8.5 billion now, but it trades at only 4.6-times this year’s expected earnings. Seagate is worth about $10.25 billion but it trades at 5.1-times this year’s expected earnings. Both companies have made major acquisitions in the last year.

What can the storage and drive makers do to maintain margins and to keep driving sales? Filling up more than 1 TB requires storing movies permanently, but now tech buyers can buy 3TB for what is getting closer and closer to that $100 mark. This sector will be interesting to watch in the next two years because Thomson Reuters is expecting that revenues are at he peak already in their current fiscal years ending next June. Both companies are expected to have declining sales in the following year.

Seagate’s $27.15 price compares to a 52-week range of $15.00 to $35.71 and Thomson Reuters has a consensus price target of $33.97. Western Digital’s share price of $35 compares to a 52-week range of $24.96 to $45.94 and Thomson Reuters has a consensus price target of $40.44.   Both of these stocks show up in just about any deep value screen that can be run by investors. Now you know why. Investors generally call situations like this a value trap.

JON C. OGG