Notebook price drop causes channel angst

Vendor price wars, a weak dollar and major retailers entering the IT market have all contributed to driving the average price of notebook PCs on the UK high street and online to less than e500 (£400).

Figures released by market research firm Context show the cost of notebooks in the volume channel ­ covering mail order and multiple retailer sales ­ fell to an average of e495.18 in the UK during April 2008. The figure dropped by almost e40 in one month and has fallen steadily since the start of last year when the average was more than e700.

Consumer notebooks now cost on average less than e480 in the volume channel, while the average cost of business models fell a massive e67.4 in one month to April’s average of e507.92.

Mark Lambert, technical director of VAR Bear IT, which sells online, claimed he was surprised to see an HP laptop on sale in Tesco for less than £350. “I would like to see restrictions on non-specialist outfits, which are able to get cheap deals from manufacturers because of their buying power. Even PC World has suffered. We should give some kind of precedence to specialists,” he said.

“The prices will level off, but I could imagine it going to £250. It pushes margin out of the door.”

However, in the value channel, which covers dealers and corporate account resellers, the average cost has risen in the past two months. In April, it stood at e655.67, up almost e50 from February’s average.

Marie-Christine Pygott, senior PC analyst for Context, told CRN that vendor price wars had contributed to the sharp drop offs and that prices could continue to fall.

“The first quarter was characterised by increased competition and by a very weak dollar, which made component sourcing cheaper in the retailer area,” she said.