First, it was the warnings of a memory shortage, and now the word is that general shortages of most components that make up a PC will lead to increased prices this year. So says the Maximum PC article which quotes the Gartner market research group.
Market researcher Gartner is making the call: the six-year decline in PC prices will come to an end later this year, so get ready to pay more. The culprit: a shortage of components.
Manufacturers are facing two problems. Problem one: with prices falling (and the economy crashing), manufacturers have been scaling back on production, resulting in a shortage. Problem two: manufacturers are in the process of ramping up new production lines, and aren’t yet able to meet current demand.
A perfect example is memory. DRAM manufacturers are shedding DDR2 capacity and adding DDR3 capacity. This results in shortages in both, as DDR2 demands are going unheeded, while DDR3 demands are going unsatisfied. Memory makes up about ten percent of the overall cost of a PC, which makes significant the recent 23 percent jump in DDR3 spot prices.
Also in short supply: LCDs and hard drives, with prices for each expected to jump 20 percent. Optical drives are also getting harder to come by.
OEMs can absorb some of these cost increases, but with margins as thin as they are they can’t absorb them all. Some will be passed along to the consumer. How much remains to be seen.
I have noticed the optical drive prices increase, which usually doesn’t happen in the 4th quarter, but along with that, there are many fewer models than ever before. Some of the hard drives that are in the 1TB capacity were out of stock at the usual places for a few days before and after Christmas, and several other items I was personally shopping for were not available at reasonable prices (of course, at retail places like Best Buy had plenty!).
If this is true for more than memory, it will truly be an interesting year – will this choke off the adoption of Windows 7 by big business?
Will upgrading get big again in 2010? Using parts you already have saves money.