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Get in early or pay 10% $ hike tax... may already be too late

Procurement professionals of Britain must get ready for blanket price hikes of up to 10 per cent as rising component costs get passed down the supply chain by tech makers.

A bunch of vendors confirmed the cost on the box – whether it be PCs, servers or networking gear – is set to rise on the back of a surge in the value of the dollar relative to the Brit pound and euro. Software will also be impacted.

Distributors pointed out a 10 per cent currency appreciation in recent months gave manufacturers little option but to act, though not all have yet adjusted them.

“The vast majority of IT components are denominated in dollars, its the international currency, and there’s not enough margin in the channel or at manufacturer level to delay this price rise any longer,” one told us.

Vendors had mulled introducing price rises six weeks or a quarter ago ago but competition in the market forced them to reconsider.

The currency pair last week dropped to $1.495 pence per £1, the lowest level since July 2013, and with the Bank of England interest rate rise hanging in the balance, continued volatility is forecast.

All products in HP’s Enterprise Group will be impacted by the upward swing. The company confirmed that it, “like any other international company, adjusts prices based on exchange rage and current fluctuations”.

“Adjustments in pricing are always communicated to our partners and customers through existing communication channels,” said a spokeswoman. The company has yet to comment about its PC or printer portfolio.

Over at Dell, a spokeswoman insisted the company strives to provide the ”best value” to punters, but refused to talk about specific hikes on products.

“As always, we will continue discuss any price fluctuations in advance with our customers and partners to ensure complete transparency,” she said.

Lenovo UK said that it too takes currency exchange rate into consideration in product planning, and like Dell and HP, refused to talk specific on the extent of the price rise.

“This is business as usual and part of the market conditions in which any international company operates.  Any changes form part of our ongoing communication to our channel partners,” said a mouthpiece.

The situation is being monitored by the folk at Acer, saying it will “apply price increases where and only IF needed. At this stage it’s impossible to say when, where and on what”.

Distributors told us the price rises were between five to 10 per cent, and one advised resellers to get to grips with the increases so that customers understand the pressures involved.

Pricing already agreed on existing deals should be honoured – we’d be interested to hear if they aren’t – but any suppliers sat on ageing inventory may well find themselves facing write-downs.

We have asked Microsoft for comment and the request is currently with the marketing pixies, probably in Redmond, who are trying to ascertain whether or not they should comment. ®

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