Consumers will delay purchases due to price hike, expects Gartner

PC prices to rise by up to 10% in 2015

Sharp currency fluctuations are forcing vendors to increase the price of PCs, says Gartner. 

The analyst expects prices of computers in Europe and Japan to increase by up to 10 per cent during 2015.

"We are currently seeing the sharp appreciation of the dollar against most other currencies reflected in companies’ earnings results," said Ranjit Atwal, research director at Gartner. 

"PC vendors selling to Europe and Japan, where local currencies have fallen up to 20 per cent since the start of 2015, have little choice than to raise prices to preserve profits."

This price hike is expected to cause price-driven consumers (of PCs less than $500) to purchase less expensive PCs with lower specifications – a segment that is set to make up 30 per cent of the market.

Value-driven consumers (of PCs priced at $500 to $800) will delay purchases due to rising prices, says Gartner. This segment is expected to be 40 per cent of the market.

Finally, feature-driven consumers (of PCs priced at over $800) are set to extend product lifetimes by 10 per cent to compensate for higher prices, and absorb remaining price increases. This segment is expected to form 30 per cent of the market. 

In 2015, large businesses will prioritise other IT budgets with currency-driven shortfalls, says Gartner, such as those for software and services, for which they will draw money from the PC budget. 

"Large organisations will look to lengthen their PC lifetimes by six months (10 per cent) in comparison with 2014, rather than buying less expensive models or removing requirements for key features," added Atwal. "In addition, purchases of optical drives and optional accessories will disappear."

"While we expect large organisations to cut their PC unit purchases by 20 per cent during 2015, due to price rises, small businesses will behave like value-driven consumers and look to purchase consumer PCs instead.”

In 2015, Gartner estimates that end-user spending in constant dollars in Western Europe will reach $116 billion, a four per cent increase over 2014. 

"Device vendors will mitigate the impact of their declining "dollarised" profits by taking advantage of single-digit-percentage decreases in PC component costs during 2015, and by selling PCs with fewer features to keep prices down," commented Atwal. 

"However, vendors’ margins will fall, even as they shift their shipment focus to the regions least affected by these currency effects."

Read PCR’s full analysis piece on currency fluctuations affecting PC prices

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