Ready, set, fall: PC prices coming down as component costs decline

Ready, set, fall: PC prices coming down as component costs decline

Summary: Dell executives indicated that component costs fell dramatically in the last quarter and that's going to translate in lower PC prices in the months to come.

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Dell executives indicated that component costs fell dramatically in the last quarter and that's going to translate in lower PC prices in the months to come.

Component costs---memory, LCD screens and the like---fell in Dell's fiscal third quarter and gave Dell a nice margin boost. However, Dell CFO Brian Gladden said that those component price declines will work through the supply chain and ultimately lower prices.

Gladden said:

As we look at component pricing, we saw what we would call a more normalized commodity deflation environment in the quarter. And, as we think about how that trends going forward, we will continue to see a similar environment I think as we head into the fourth quarter. We will begin to see, I believe, that deflation really work its way through the supply chain and affect pricing over the next couple of quarters.

Gladden added that these PC price declines are likely to result lower prices industry-wide. "As these components cost declines work themselves through the industry supply chain, we do expect the industry pricing environment to more fully reflect these changes," he said. Gladden added:

There will be some areas where I think it will bottom out a little bit in maybe LCDs and hard disks as we see those markets play out. And then the third thing obviously is, as pricing works its way through, we would expect to see a little bit more challenging sort of competitive environment.

In other words, Dell pocketed the difference between component costs and PC prices this quarter, but vendors are likely to scrap harder for your business. Dell executives also added that the company is moving toward a "value-based pricing methodology." Bottom line: The fourth quarter is likely to bring better deals for the PC buyer so don't have an itchy trigger finger on a purchase.

Topics: Banking, Dell, Enterprise Software, Hardware, Software

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42 comments
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  • great news for apple

    now they can get an even larger profit marging by using even cheaper stuff in their computers
    Ron Bergundy
    • UMM...

      @cyberspammer The article states that they are lowering PC prices as the components have gotten cheaper. This means profit margins will remain the same- so what part of this aren't you understanding, and when did "profit" become a dirty word, anyway?
      ddferrari
      • RE: Ready, set, fall: PC prices coming down as component costs decline

        @ddferrari That's not how apple works. Component prices get cheaper and apple margins go up. Just look their computers are the same price as laptops from 10 years ago, but the components of today are much much cheaper.
        Jimster480
  • RE: Ready, set, fall: PC prices coming down as component costs decline

    Hmm might be time to upgrade the old beast.
    Loverock Davidson
    • Finally going to get rid of that old Comardo 64? Lovie

      Its about time :-)
      Over and Out
    • RE: Ready, set, fall: PC prices coming down as component costs decline

      @Loverock Davidson You mean you're finally switching from Windows 7 to Linux. :D
      Socratesfoot
      • RE: Ready, set, fall: PC prices coming down as component costs decline

        @Socratesfoot

        No he said upgrade.
        bobiroc
      • RE: Ready, set, fall: PC prices coming down as component costs decline

        @bobiroc

        LOL.
        LBiege
    • RE: Ready, set, fall: PC prices coming down as component costs decline

      @Loverock Davidson

      Be nice to your mom
      maskman01
    • Make your trolling 70% faster

      @Loverock Davidson
      HollywoodDog
      • RE: Ready, set, fall: PC prices coming down as component costs decline

        @HollywoodDog
        You should talk, Mr. Dog!!??
        eargasm
    • RE: Ready, set, fall: PC prices coming down as component costs decline

      @Loverock Davidson build. Dont buy.
      Jimster480
  • RE: Ready, set, fall: PC prices coming down as component costs decline

    In other news, Apple still maintains the same exuberant prices on all their crappy-but-pretty stuff.
    nicholas22
    • RE: Ready, set, fall: PC prices coming down as component costs decline

      remove as I accidentally replied to the wrong comment
      bobiroc
  • What BS

    Wow, it's "time-to-slam Apple" again... I don't own any Apple computers, btw...just tired of the same ol' BS from the 'core' haters out there.
    slimmac1
    • Yeah, yeah. They'e all full of it.

      @slimmac1 Ah, come on. All computers I've used are pretty crappy. Crapple, Winblows, Loonux ... it doesn't matter.

      Crapple: Waaay to cool and spendy. But waaay cool. Did I say how cool Crapples are?
      Winblows: You gets what you pays for. But it works. Mostly.
      Loonux: A programmer's dream. Cheap, nasty and a manual per command line utility. Woohoo!

      I actually appreciated Lindows, which actually made an attempt to put it all together in one. So, thanks to Microsoft for making that impossible, but kudos for recognizing the threat!
      dippleydokus
      • RE: Ready, set, fall: PC prices coming down as component costs decline

        @dippleydokus I think Winux is a better name :-)
        ivanfarkas
    • RE: Ready, set, fall: PC prices coming down as component costs decline

      @slimmac1
      What about the comments up above about Microsoft? How do you roll withthat??
      eargasm
    • RE: Ready, set, fall: PC prices coming down as component costs decline

      @slimmac1

      From what I have seen lately, they all have their fair share of faults.

      Microsoft charges to much, and has to patch the patch that broke the patch for the patch. And they can't provide a functioning progress bar (Microsoft time).

      Apple charges to much, and tells you that if anything is wrong, it's your fault for holding it wrong. And if you want a functioning progress bar, there is an app for that.

      Linux doesn't charge, but they don't support the fact that you held it wrong, and don't care if you don't have a progress bar.

      I want to take all three and create a new OS called WinAppLix. It will cost way to much, need a lot of patches, cost a furtune to add new features (apps), and you'll have to shoehorn your own wireless drivers into it through a command prompt. The last one will be called a feature that can be fixed by buying the new upgrade, applying the latest patches, and then still having to compile in the command line.


      When will programmers learn that the average user is doing good to find the power button?
      ShadowGIATL
  • Apple??

    Where in this article is there any mention of Apple? Go peddle your FUD somewhere else!
    superkeith