Want a new PC for work? Get ready to be disappointed

The US dollar may give cheap Chromebooks an extra nudge this year, but enterprise spending on high-end hardware is expected to take a hit.
Written by Liam Tung, Contributing Writer

If you're hoping for a new work PC, keep on hoping: businesses are set to keep sweating their existing hardware in the face of rising prices for new machines.

Analysts Gartner predict that PC prices will rise this year, possibly by as much as 10 percent, as vendors offset the effects of the strong US dollar on profits in markets such as Japan and Western Europe.

"We are currently seeing the sharp appreciation of the dollar against most other currencies reflected in companies' earnings results," Ranjit Atwal, research director at Gartner, said.

"PC vendors selling to Europe and Japan, where local currencies have fallen up to 20 percent since the start of 2015, have little choice than to raise prices to preserve profits."

Rival analyst house IDC reported PC shipments in Japan were down 44 percent year on year for the first quarter of this year, while in Europe a similar slowdown left vendors focused on clearing out lower-end Windows machines.

Hardware makers are expected to change their strategies as a result of the fall in their 'dollarised' profits, trimming back the features they may have previously packed into machines in order to keep costs down. However, their margins are still set to decline, according to Gartner, spurring them to increase prices.

The analyst expects the total value of the PC market to grow four percent this year to $116bn (at today's fixed US dollar exchange rate), thanks to vendors' price hikes.

Business buying

Enterprise buyers will shift spending from PCs to software and services, resulting in a 20 percent decline in enterprise PC unit purchases compared with 2014 levels. Rather than buy cheaper hardware, they will look to extend the life of existing equipment and cut out peripherals, according to Gartner.

"Large organisations will look to lengthen their PC lifetimes by six months (10 percent) in comparison with 2014, rather than buying less expensive models or removing requirements for key features. In addition, purchases of optical drives and optional accessories will disappear," Atwal said.

Meanwhile, the analyst expects small businesses to behave more like "value-driven" rather than "price-driven" consumers, the latter being the sweet spot for devices in the sub-$500 market served by Google's Chromebook partners and cheaper Windows hardware.

Gartner expects sub-$500 PCs to account for 30 percent of the market in 2015, while the value-driven $500 to $800 category will account for 40 percent. The remaining 30 percent will cover PCs over $800.

Price-driven consumers - those buying PCs priced at less than $500 - will purchase less expensive PCs with lower specifications to counter price rises.

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