Special report: Channel hit by component cost rise

Special report: Channel hit by component cost rise

The downward trend in PC prices could be halted temporarily as recent fluctuations in the price of random access memory (RAM) and LCD/TFT monitors have filtered through to both the major brand name vendors and local systems assemblers.

Builders of PCs are being faced with a tough choice in the wake of the rising costs: increase prices, or configure machines with fewer features to maintain a competitive price point.

According to PC vendors and system builders contacted by ARN, the price of RAM has increased by as much as 200 per cent within a matter of months. Mark Roberts, CEO of components supplier ServerBits, said the increase has affected a lot of systems builders, but fortunately supplier forecasts indicate the price should stabilise over coming months.

Roberts said the manufacturers of components had been doing it very tough of late, and last year they were selling at attractive prices and terms to generate cash flow. Now that the economy is showing some signs of recovery, manufacturers are attempting to recover some of the losses they incurred last year. "The manufacturers that were keen to move any stock they could last year are now seeing the supply-and-demand patterns shift and are even placing minimum-order quantities on their shipments," he said.

Component prices have also had an effect on sales of monitors. In the last month, the price of LCD/TFT monitors have risen by around 20 per cent and several manufacturers have indicated that prices will continue to rise for a few months yet.

For ARN's special report on the components shortage read this week's issue (April 17, 2002), out now!

Read about:

- PC vendors forced to jack up prices due to component hikes.

- How the white-box market is faring.

- What the long-term effects are.

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