PC buyers finally start seeing memory price breaks

PC buyers finally start seeing memory price breaks

Summary: PC makers have been getting breaks on DRAM pricing but buyers haven't seen much of break. Apparently that state of affairs is changing.

TOPICS: Hardware

PC makers have been getting breaks on DRAM pricing but buyers haven't seen much of break. Apparently that state of affairs is changing.

Cheaper memory prices have been noted for weeks. Apple said memory and other components were cheaper on its earnings conference call. Other manufacturers have seen the same dynamic. However, few of them have passed lower prices onto consumers.

Slowly but surely the pricing log jam appears to be breaking.

In a research note, A.G. Edwards analyst David Wong said that Dell and HP have both dropped the incremental price for a 1GB upgrade in a new PC by $20 to $30 over the last 10 days (Reviews: desktops and notebooks).

Wong wrote:

As we have noted previously, while DRAM pricing has fallen over the past several months, the price of DRAM to the PC buyer has remained unchanged. This appears to be correcting itself, as both Dell and HP appear to have lowered pricing for DRAM to the PC buyer.

The big question: Why now? Since September 2006, DRAM price per gigabyte remained unchanged at about $120 while the contract price from memory makers has fallen from $100 to $40, said Wong.

The PC pricing developments indicate two things. First, PC vendors may need to stimulate memory upgrades. Second, a lot of PC makers were saddled with DRAM inventory purchased when it was more expensive.

Wong said it's likely that PC vendors loaded up on DRAM inventory ahead of the Vista launch. If Wong's theory is right PC makers are just now working off that excess inventory. The good news: PC memory prices are about to get cheaper.

Your move: Put off buying a PC to save a few bucks. The risk is that too many people put off buying a PC and what DRAM that's left in the channel doesn't get worked off.

"Even with prices coming down for DRAM to the PC buyer, prices still remain rather higher, and we suspect may continue to have a dampening effect on purchases by PC buyers excited about Vista," said Wong. "We continue to believe that pricing for DRAM to the PC buyer remains too high. We expect DRAM pricing to the PC buyer will continue to fall in the future."

A few other observations from Wong:

  • HP has apparently lowered DRAM prices first on its value desktops.
  • Dell has dropped DRAM pricing across its products line.
  • A drop in DRAM prices could stimulate PC demand.
  • Falling DRAM prices will impact desktop demand the most. Notebook PC buyers are less price sensitive. 

Topic: Hardware

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  • One possible scenario...

    The PC makers could have been offsetting other component price increases. For example, they could have been keeping the increase in LCD cost hidden by leaving its price unchanged due to keeping the memory pricing the same when its cost decreased. The pricing of the whole may be consistent even though there are fluctuations in some of the components.
    Uber Dweeb
  • How about an even cheaper option?

    Here's a thought.. how about having the option of DOWNGRADING to no RAM?

    Here's my challenge when I price out a new computer online. Say for example, the box can support up to 4 GB RAM in 4 slots. The lowest option they'll offer you is 512 MB RAM. Next one up is 2x512. I know I'm going to want to max out RAM on my computer, so I definitely don't want any 512 modules.

    However, I also don't want to pay the price of GB modules from HP or Dell either. Because oftentimes, I find much cheaper bargains at Crucial for what I need.

    So, I end up sticking with the lowest option from the manufactuer, which is a 512 mb module. That 512 WILL be taken out as soon as it gets delivered to me. Hopefully I can resell it on eBay or something, but then again, who wants a 512?

    More often than not, the 512 I got stuck paying for ends up sitting around collecting dust. If I could buy a PC with 0 MB RAM, now THAT would be a sweet deal from Dell or HP.
    • Won't happen, Chevy doesn't sell

      cars without engines either.
  • DRAM Like Seattle Housing Prices

    Once one falls...they'll all fall.
  • Still need people who can afford it.

    And our economy doesn't work by shrinking itself...