Dell raises prices, Compaq's steady
by: skeptically 04/11/02 10:01 am
Msg: 280406 of 280407
WSJE(4/11) PC Prices Climb As Costs Rise For Components
04/11 12:30 AM (WJ)
Story 0060 (AAPL, CPQ, DELL, NIPNY)
By David Pringle
The rising cost of components is beginning to push up the price of personal computers and could hold back an expected recovery in demand, according to U.S. research firm Gartner Inc.
Gartner said that sharp rises in the cost of memory chips and flat screens have pushed up the bill of materials for desktop computers and notebook computers by 11.5% and 17.5%, respectively, since the beginning of the year. Brian Gammage, a U.K.-based analyst with Gartner, estimates that PC makers' average gross margins are 10% on desktops and 15% on notebooks. "They can't absorb this," he added.
A spokeswoman in Europe for PC supplier Dell Computer Corp. confirmed that her company has increased prices recently in Europe to compensate for the rising cost of components. However, she added, "They are still not as high as they were six months ago."
Some smaller PC makers have also warned that they will increase prices to compensate for the rise in component prices. Apple Computer Inc. said last month that it would put up the price of its iMac desktop computers, which cost between $1,400 and $1,900 (1,590 euros and 2,158 euros), by $100. NEC Corp. and several other suppliers also said recently they will increase PC prices in Japan.
The rises are likely to come as a jolt to PC buyers who have grown accustomed to seeing prices fall.
"This is a market where everyone expects prices to go down," said Mr. Gammage. He added, however, that it isn't yet clear how big an impact the rising cost of components will have on the struggling PC market, which Gartner had been expecting to mount a tentative recovery toward the end of this year.
To be sure, Compaq Computer Corp., Dell's main rival globally, said it has "no current plans to increase our pricing in the near term." Compaq said it has greatly reduced its costs over the past six months by combining its consumer and commercial PC units into a single business.
(END) DOW JONES NEWS 04 -11 -02
12:30 AM |
