PC bill of materials creep higher amid hard drive shortage

PC bill of materials creep higher amid hard drive shortage

Summary: Hard drives represent 11 percent to 12 percent of the PC bill of materials.

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TOPICS: Hardware
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The bill of materials to make PCs and laptops has crept higher year over year, according to Barclays Capital estimates.

In a research note, Barclays analyst Ben Reitzes said a hard drive shortage---caused by flooding in Thailand---are likely to squeeze margins for PC makers. Based on comments from Western Digital and Seagate, hard drive prices are anywhere from 30 percent to 40 percent higher, said Reitzes.

Most of the year-over-year price increase to make a PC was attributed to hard drive costs. Memory prices are stable and so are panel costs. Hard drives represent 11 percent to 12 percent of the PC bill of materials.

What's unclear is whether PC makers will be able to raise prices.

Reitzes said in a research note:

We believe the constrained HDD environment is likely to continue to impact the PC BOM despite relatively weak demand for PCs. We continue to believe that PC margins peaked in 2011 given higher HDD costs near term and prospects for more stable DRAM and panel costs as we move through 2012. As a result, we continue to believe there are risks for eventual margin contraction (or lack of expansion) at major PC vendors like Dell and HP in CY12 – even as these vendors raise some PC prices.

In the PC equation, Apple appears to be the least affected by hard drive shortages due to the popularity of the MacBook Air.

Related: Hardware makers slog through hard disk drive shortages

Topic: Hardware

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10 comments
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  • I know I'm not buying until the HD prices come down

    There is no way I am paying 60% higher price for the disk. I can wait....
    happyharry_z
    • Yep. You are a perfect example of supply and

      demand at work.
      baggins_z
      • RE: PC bill of materials creep higher amid hard drive shortage

        @baggins_z -

        Uh-huh.

        http://www.huna.org/html/supplydemand.html

        Never mind that nobody wants to clean up other peoples' messes, but despite that nobody wants to pay the wage that would compel more people to do it...
        HypnoToad72
      • RE: PC bill of materials creep higher amid hard drive shortage

        Hit the nail on the head, Hypnotoad72. The fact is that supply and demand is a myth put out by radical conservatives who HATE putting controls on industries that are able to punk that thing in question by colluding with each other.

        Why are they so reticent to do that? Because they usually own/have connections with the companies that are doing the colluding.
        Lerianis10
  • Software

    A whopping 16.9% goes to software according to the chart above. <br>Very expensive yet no backup DVD's available for this costly thing.
    Martmarty
    • RE: PC bill of materials creep higher amid hard drive shortage

      @Martmarty

      Well remember.... for EACH computer Windows 7 Home Premium (most common) costs 200 dollars for the company in question... maybe a little less with 'bulk' purchasing.
      Lerianis10
  • RE: PC bill of materials creep higher amid hard drive shortage

    It's cheaper right now to buy an external HDD than an internal. Just did that last week, bought an Hitachi external 2TB HDD for 100$ and ripped the case open and put the HDD in my PC, making it an internal drive for 40-60$ cheaper than buy the 2TB HDD internal (they are between 140-160$ where I live).
    lepoete73
    • RE: PC bill of materials creep higher amid hard drive shortage

      @lepoete73 -

      I wonder what manages to keep the external drive prices low.

      It's not the usual "supply and demand" excuse, or else their prices would have gone up in equal proportion as well - because the prime element (the HDD) is not as plentiful... the same "law" is not being applied... so, yeah, eyebrows are being raised...
      HypnoToad72
    • Well now...

      @lepoete73
      That was just brilliant and a painstakingly hilarious way to get around the "floodwaters." If in the event I suddenly need a internal, I will use your idea, thanks for it.
      gh01
  • RE: PC bill of materials creep higher amid hard drive shortage

    my classmate's aunt makes $78 an hour on the laptop. She has been fired from work for 5 months but last month her income was $8845 just working on the laptop for a few hours. Go to this web site and read more... LazyCash9.com
    leon6600