Manufacturers' High Prices Killing PC Sales: Report

Dennis Faas's picture

It's a well-known fact that the PC industry is in trouble. The rise of portable devices -- like smartphones and tablet computers -- has caused a consistent decline in PC sales. But some experts believe PC hardware makers are also to blame.

The problem: PC prices remain too high for many consumers.

Two months ago analyst firm IDC predicted a 1.3 per cent decline in PC sales through 2014. The grim prediction was based on PC sales through the first three months of 2013, when manufacturers shipped just 76.3 million units -- 13.9 per cent lower than the same period in 2012.

Worldwide, second quarter sales were down 10.9 per cent from 2012. (Source:

Ultrabooks Both Super-Portable and Super-Pricy

Now, several analysts are pointing to high PC prices as a cause for these problems. Drawing the attention of these analysts are laptops and 'ultrabooks' equipped with Intel's new Haswell processor.

Most Haswell-equipped notebook computers sell for $800 or more. Some, like the recently launched Samsung ATIV Book 9 Plus or the Sony Vaio Pro 13, retail for almost $1,500.

For Endpoint Technologies Associates president and principal analyst Roger Kay, that's like asking a homeless person if they'd be interested in buying a new Ferrari.

"The thought that you can sell a $1,400 notebook is ridiculous," Kay said. PC makers "don't get it," Kay added. "They refuse to deal with the reality of what's going on."

Hardware Makers Push Premium Devices

Of course, there are cheaper options. Dell, Samsung, Lenovo, Hewlett-Packard and most of the other leading PC manufacturers continue to build laptops that are in the $400-$600 range.

However, these devices are hardly 'pushed' by hardware makers who know they'll make less money selling a lower-end device.

"In general, many vendors stay away from the low-priced market and secure better margins on the mid- to high-end laptops," noted Gartner research analyst Mikako Kitagawa.

According to Pund-IT analyst Charles King, most hardware makers are just fine with selling fewer PCs, so long as they carry a premium price tag.

"Intel has been working both internally and with other component makers to bring unit price ... to the point where OEMs can build and make a profit on PCs," King said. (Source:

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