PC Prices Unaffected Despite Cost Reductions in Components

Online, October 15, 2010 (Newswire.com) - Prices for memory and hard-disk drive components fell for the third consecutive month in September, according to latest data from CONTEXT's PriceIT benchmark service.

PC component prices experienced a continuous month-on-month decline since reaching a peak in June, which had followed on from their strong rise earlier this year. Average sample pricing* for a 1024 MB DDR3 memory component amounted to £21 (€24) in June but only £17 (€19) in September, falling by as much as 20% in the space of just three months. The recent decline in PC component pricing has largely been caused by the wide-ranging adoption of improved technologies in the component production process, which has enabled manufacturers to produce more efficiently and pass cost savings on to customers. Weaker-than-expected demand for Notebooks and Desktops in the run up to the consumer-oriented back-to-school season have also been a contributing factor in recent price developments.

"PC demand in early Q3 this year has not been quite as strong as the industry was hoping", said Alan Tilanus, VP - PriceIT at CONTEXT. "What this means for PC components is that in the medium term, we might be facing an oversupply as we move into Q1 2011. This would of course lead to even more significant price cuts".

Prior to the price peak in June, PC components had experienced a year-long, steady increase in pricing caused by a shortage of supply. After the onset of the economic crisis in Europe during 1H09, manufacturers had became overly cautious and scaled back production and investments in order to survive the economic downturn.

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Notes to editors:

* Pricing is average sample distributor pricing, source in France and Germany
** France and Germany are chosen as representatives of the biggest Euro-economies

Graph: http://www.flickr.com/photos/45691819@N02/5082930243/#/