PC Prices Set to Rise in 2010 Due to Shortages

Posted by Daniel Shain

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Hope you've recovered from the economy - analysts have predicted that due to shortages of PC components, primarily memory, PC costs should rise this year for the first time in years.

Remember when Vista came out, and DRAM manufacturers chomped at the bit to produces the sizable amount of RAM the global transition from XP to Vista would require? And then when Vista adoption was wildly below expectations, remember how wonderfully suppressed the cost of memory was?

Oh, for those winsome days of yore.

Analysts over at the Financial Times have predicted that PC costs should rise 2.8% this year, bucking a 7 year trend which had prices sinking by an average of 7.8%. The principle reason for this is an increase in the cost of memory, which has gone up by 23% and accounts for roughly 10% of PC manufacturer's costs.

The reason for the increase in price for RAM is twofold. First, many companies were hit hard by the global recession and delayed plans to build new factories, meaning production flatlined even as demand has started to increase. New factories are on the way, but their effects won't be felt immediately. The second reason that is more specific to memory is that the industry is in the process of shifting from DDR2 to DDR3, meaning their limited production is split two ways, exacerbating the situation.

To put it another way, if you were thinking about buying a PC soon, I'd say do it now or be prepared to wait a while for good value. Prices should go down again when supply fully picks up.

Relatedly, the price for flat screen monitors is also set to rise. FT speculates curiously that the increase in prices could be bad news for budget laptops, which won't be quite so budget anymore, meaning the market could shift to pushing more expensive machines.

Via FinancialTimes

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