back to article Brexploitation! PC price wars? Yep. Vendors see who can go higher

Computer trade prices have surged in the year since the EU referendum with currency and component shortages fingered, at least according to sales data from tech distributors. The stats, collated by channel analyst Context, showed average sales prices (ASPs) on consumer and business machines sold to wholesalers in the UK …

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Unhappy

The "Leave" result didn't have to be an excuse to gouge people on prices

But it looks like that's what it's been used for.

Given there was a definite drop of Stirling against both the $ and the Euro following the (just about) re-election of Prime Minister May there will probably be a few more "price adjustments" working there way through the channel.

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Re: The "Leave" result didn't have to be an excuse to gouge people on prices

Take the fall of the Euro plus price rises of 10% - 15% in mainland Europe and you probably come close to 35-40% in total in the UK.

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Unhappy

So What's new?

The {cough}free market{cough} always uses any excuse to price gouge.

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Anonymous Coward

Re: So What's new?

Logic states if you have more choice of vendors and suppliers, prices will drop.. not always successful, but that's what the regulators are for.. I often get stuff imported more cheaply from the continent and saved a small fortune in years gone buy... Now it's bye bye to that, as you watch prices keep creeping up. Oh and don't forget import tax for everything!

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Re: So What's new?

Actually a free market doesn't. It's when there are restrictions on the markets and which suppliers you can use (ie, a captive market) that gouging happens.

Luckily I have authority to dump suppliers who think they can pull this shit - and the fact that until brexit, we have a single pan-european market is quite handy when "exclusive UK agencies" decide they're going to play stupid games - and it's amusing to see them pull temper tantrums & try to block sales. That kind of shitslinging can and does result in a visit from the Competition and Markets Authority.

When you do the math on the overall drop in Stirling vs the origin costs (Rimbani) you find that with a few exceptions the final price rises so far are slightly lower than might be expected, so profit margins (already tight) are being eaten into and that's not a sustainable thing long term - if they're set too low then warranty claims will start killing companies. In other words you can expect a few percentage points of climb later on.

30% drop in currency is NOT a 30% increase in direct costs. It's a 50% increase. (2/3 of the value means that your imports now cost 3/2 as much, similarly if your currency halves in value(1/2), then import costs double(2/1))

This is basic algebra and I've had to spend more time than I should explaining it to PHBs who should know better and are complaining that I should be able to negotiate better pricing. Given this level of knowledge inside organisations it's no surprise budgets get fucked up.

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Anonymous Coward

Will prices go down when Brexit doesn't happen ?

Bet not ...

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Unhappy

Re: Will prices go down when Brexit doesn't happen ?

p{very unlikely event) x p (even more unlikely event) == number very slightly above zero.

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More lies through stats

This is average selling price. Not the same as inflation. Has there been a shift in the quality of PCs being bought?

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Re: More lies through stats

Indeed the price rise as stated is not a like for like products, like the analyst said:

"PC ASPs have been on the rise since Q3 2016," said Marie-Christine Pigott, senior analyst at Context. "The increase has been driven by currency fluctuations, price increases by vendors to offset the effects of higher component costs, and also by a shift to higher-value products such as gaming systems in the consumer segment and powerful, high-end notebooks in the commercial sector."

So not so much as ripoff but selling better stuff at a higher price as in the words of El Reg:

"El Reg hasn't noticed prices of finished products available on the High Street or online rising by that amount, but hey, that's what the numbers stated."

Except that is not what the numbers stated!

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WTF?

said it before....

The dizzies put all their prices up almost over night on what was mostly likely 'paid for' stock in their warehouses. It's got little to do with brexit and everything to do with a quick buck.

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Re: said it before....

It is. They also mark up for multiple currency fluctuations in the chain. We buy direct from supplier and assemble in the UK so our only issue has been the drop in the pound making our own brand kit more attractive against the "name" brands we also sell.

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Happy

Sweden

While it's clear that the stupidity did hit the Swedish crown too there has to be something else too in the "18" compared to the "7 to 12" in the Euro block. And also when the $ goes down the £ goes up and vice versa, and as most of that IT equipment is not made in the USA there is again other currencies to take into account.

The vendors are free to demand what ever they decide is possible, as before.

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Anonymous Coward

SSDs

My first SSD, a Corsair Force GT 120GB cost £140. That was years ago. I watched as prices plummeted and you could then pick up 120GB for less than £35 and 240GB for around £45. Over the last year or so, prices have risen steadily to around £50 for 120GB and around £80 for 240GB. It's shocking I tell you. Shocking. I blame Apple. They charge $100 for 16GB more storage in an iPhone/iPad. Greedy barstewards

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Anonymous Coward

Hard Disk pricing per TB, aka Price Fixing.

Since the consolidation of the spinning rust industy to just (pretty much) two players Seagate and Western Digital, there has been a move to price Hard Disks per TB. i.e. 2TB is double the price of 1TB, 3TB 3x, 4TB 4x, etc. Even Toshiba has now followed this pricing model with their 5TB rising from circa £110 to £150/£180 for internal/external verison respectively.

The external versions used to be priced cheaper too.

The only way this could happen is via pricing fixing between the two big players Seagate and WD, agreeing that HD's should be priced in this way, because the build cost/raw materials of a 10TB Hard Disk v 1TB Hard Disk are not 10x the build cost/raw materials of a 1TB hard disk.

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Meh

"El Reg wonders if PC vendors will be so quick to correct prices when the pound starts to strengthen again at some point in the next hundred years or so. Probably not. "

Far more likely that you'll be bartering chickens with any PC vendors still operating here.

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Guilty as charged

Back when my country of residence moved to the Euro, I raised my hourly prices, but to be fair\honest, I hadn't raised my prices in the previous 3 years. Only one client mentioned the increase.

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By the time the £ recovers to pre-exit levels

Possibly nobody much will even remember what a PC was.

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Re: By the time the £ recovers to pre-exit levels

Noting the pattern of down-voting I get on these posts I can make one observation: Brexiters have not the slightest sense of humour, and cannot bear to be laughed at.

But, even more, they are utterly ignorant of economics. Tell me one fiat currency that has actually appreciated in value over the long haul, in terms of purchasing power? It doesn't happen. Every time there is economic stress, due to wars or self-inflicted foot shooting, currencies inflate faster. But they always inflate - that's why the inflation figure is quoted in official statistics. In purchasing terms that £ will never, ever reach pre-exit levels. Hence my comment.

It is possible if Trump does enough damage that the £ will reach a larger number against the $, but the $ will be worth a lot less.

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Why is anyone still surprised by this?

It's always been this way... one of the most recent things that springs to mind is what happened to HDD's after the floods of 5-6yrs ago. In the immediate days after the floods... Every single vendor raised the prices of their 'exisiting' stock and claimed it was due to lack of supply. The fact that this stock was already on the market at the old prices was ignored and it was nothing more than price gouging.

Those higher prices have NEVER fallen back to the pre-flood prices. Instead theyve stayed the same for around 6yrs now whilst newer larger capacity drives are just brough in at ever increasing prices that never reduce over time.

Based on almost 20yrs experience of buying hard drives, from around 2GB upwards. I have always paid an average of £60-70 for each HDD in a larger capactiy... Roughly doubling or tripling the size each time.

Now... I paid £115 for a 4TB drive 2yrs ago and today the same HDD is a little more expensive than that.

It's not down to a slow down in the market, that's only affecting small capacity drives due to the uptake of SSD's. Larger capacity drives are still the best VFM over SSD... and until you can get a 4TB SSD for less than a HDD there's no reason to make the switch.

So they continue to price gouge consumers to artificially keep profits higher on a platform that will eventually become obsolete. In the meantime, my media server gets lower and lower on space and I refuse to upgrade because to make it worthwhile I need to replace a couple of my smallest 3TB drives with at least 6TB ones or it's not worth doing... But it's cheaper to replace the motherboard with one with extra SATA sockets and buy another 4TB that fork out for a single 6TB drive... For the price of 2x 6TB I could also replace the CPU and double the memory, or buy a low end Ryzen setup... and those aren't exactly cheap.

The consumers are always shafted... just that here in the UK, we're getting shafted more than most..., and we're expected to bend over, lift our shirts, drop our trousers and say 'thank you' for the priviledge.

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Street pricing

"El Reg hasn't noticed prices of finished products available on the High Street or online rising by that amount, but hey, that's what the numbers stated."

What happens with retail channels is they're built to a price, so if the component costs go up, the spec slips.

This happens in a lot of channel sales too. We have ~£1k to spend on our scientific desktops and have had to cut back on CPU + ram to make them fit inside budget.

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El Reg wonders if PC vendors will be so quick to correct prices when the pound starts to strengthen again at some point in the next hundred years or so. Probably not.

Won't happen, in 5 years, you will switch to the Euro.

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@ Hans 1

"Won't happen, in 5 years, you will switch to the Euro."

Why on earth would we want to do that? The reason we didnt get stuffed like Greece is because we have our own currency. I do worry about the people who still think we should join the Euro. A currency that probably wont exist for too much longer*.

*I am aware this claim has been made before. Mostly before people realised the EU would sacrifice countries before accepting the failure of its currency.

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Anonymous Coward

Brexit Sucks

My own company announced a 10% cut in its workforce last week because of rising hardware and software costs since the referendum.

Anonymous because I'm not sure if I'm staying or going.

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