PC makers hike prices – in Asia

Dell takes different tack

Last week it was Apple: this week it is the turn of Japanese PC makers NEC and Sony and Korean maker Trigem to follow suit.

They are increasing prices in Asia, citing increased component costs. This is the first time that PC prices have risen in Japan for five years, according to Bloomberg.

Sony is raising prices by up to 10 per cent, while in Korea, Trigem is hiking prices by three per cent.

But are the price rises sustainable? The Japanese PC market is described as saturated, and demand is already depressed. Price rises will, presumably, depress demand even further.

Apple last week hiked iMac prices by $100 a unit, blaming higher prices for DRAM and LCD monitors. And at the end of January, several prominent PC builders in the UK, including Time and Mesh, raised prices in response to a sudden leap in DRAM costs.

Dell is taking a very different tack: instead of raising prices, it is protecting price points, by offering less for the money. This is achieved, more by charging for - say, memory - which was formerly bundled in for "free", CNET notes.

In recent days, SDRAM spot prices have tumbled; however, LCD monitor prices are soaring, up by $60 a unit for the benchmark 15in desktop flavour, in just two months.

DRAM prices are expected to be fairly stable this year, with so-called bits-per-box count outstripping supply. Samsung and Hynix are increasing DRAM production by 45-60 per cent this year (depending on product line), while demand is forecast by Micron to rise as much as 75 per cent in 2001.

The prices of TFT-LCD monitor prices tumbled in the last year and a half, or so, leaving many makers selling at a loss.

With soaring demand from notebook makers, and a growing switch from CRTs to LCD purchases by desktop PC buyers, the balance of power has switched again to the manufacturers. They will milk it while they can. But with a heap of new production capacity coming on stream in the second half of 2002, this opportunity to make a decent profit may not last too long.

Finally, prices for the two other major PC components - drives and CPUs - will continue falling, so there is no need for panic buying. ®

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