Channel hit by component rise

Channel hit by component 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 pricing on RAM we had in December and January was due to over-supply - the stuff was getting dumped to clear," explained Tim Falinksi, general manager of NEC Computers Australia.

The price rises are viewed with suspicion by many systems builders, who believe it has more to do with consolidation among memory manufacturers. Tim Tay, managing director of WA system builder Trinix Computers, said that when the number two and three suppliers of memory product, Hynix and Micron, are working together, the most likely result for the buyer is higher prices.

Micro-Pro's Robert MacPherson disagrees. "I think part of what is going on with SD RAM is that suppliers want to get rid of it," he said. "DDR is not that much more expensive now - now there is only a $10 a slab difference."

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. Roberts expects the price of such monitors to rise by at least 10 to 20 per cent in the next three to four weeks. "For a 15-inch monitor, you are looking at a price rise of about $60-$100 per panel," he said. "That is going to hit the notebook manufacturers the hardest."

MacPherson said that prices are only on the rise on entry-level LCD monitors (15-inch), and anything larger is holding a steady price point.

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