PC Prices to Climb for First Time in 6 Years

Posted 01/12/2010 at 2:38pm | by Bart Salisbury

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Market researcher Gartner is making the call: the six-year decline in PC prices will come to an end later this year, so get ready to pay more. The culprit: a shortage of components.

Manufacturers are facing two problems. Problem one: with prices falling (and the economy crashing), manufacturers have been scaling back on production, resulting in a shortage. Problem two: manufacturers are in the process of ramping up new production lines, and aren’t yet able to meet current demand.

A perfect example is memory. DRAM manufacturers are shedding DDR2 capacity and adding DDR3 capacity. This results in shortages in both, as DDR2 demands are going unheeded, while DDR3 demands are going unsatisfied. Memory makes up about ten percent of the overall cost of a PC, which makes significant the recent 23 percent jump in DDR3 spot prices.

Also in short supply: LCDs and hard drives, with prices for each expected to jump 20 percent. Optical drives are also getting harder to come by.

OEMs can absorb some of these cost increases, but with margins as thin as they are they can’t absorb them all. Some will be passed along to the consumer. How much remains to be seen.

Image Credit: MyrtleBeachBob/Flickr