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PC Prices to Rise by Up to 10 % iin 2015

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Through 2016, 30 Per Cent of PC Consumers will buy  a less expensive PC

Gartner Says Device vendors will have to raise the prices of PCs to offset the effects of currency devaluation, The price of PCs in the Eurozone and Japan, in particular, will increase by up to 10 per cent during 2015.

According to Ranjit Atwal, a research director at Gartner , we are seeing the strength of the dollar against most other currencies and this will reflected in companies' earnings. PC vendors involved with the US Dollar, who are selling to Europe and Japan, where local currencies have fallen up to 20 per cent against the USD, since the start of 2015, have little choice than to raise prices to preserve profits.

In 2015, Gartner estimates that end-user spending in constant dollars* in Western Europe will reach $116 billion, a 4 per cent increase over 2014. This increase reflects the expected price increases in local currency (see Table 1).

Table 1: Total Device End-User Spending in Constant Dollars,

Western Europe, 2013-2017 (Millions) 2013       2014            2015          2016           2017
Cost to End-User ( Spending)           110,551   111,572       116,086     117,381      113,864
Source: Gartner (April 2015)

"Device vendors will mitigate the impact of their declining "dollarised" profits by taking advantage of single-digit-percentage decreases in PC component costs during 2015, and by selling PCs with fewer features to keep prices down," said Mr Atwal. "However, vendors' margins will fall, even as they shift their shipment focus to the regions least affected by these currency effects."

Consumer Behaviour
In mature markets, PC sales are determined by price and, through 2016, Gartner expects that 30 per cent of PC consumers will buy down the price curve. Gartner analysts also expect the following behaviours amongst PC consumers:

•Price-driven consumers of PCs priced at less than $500, will purchase less expensive PCs with lower specifications to counter price rises. This segment is expected to be 30 per cent of the market.

•Value-driven consumers of PCs priced at $500 to $800 will delay purchases due to rising prices. This segment is expected to be 40 per cent of the market.

•Feature-driven consumers of PCs priced at over $800 will extend lifetimes by 10 per cent to compensate for higher prices, and absorb remaining price increases. This segment is expected to be 30 per cent of the market.

Business Behaviour
In Gartners view during 2015, large businesses will prioritise other IT budgets with currency-driven shortfalls, such as those for software and services, for which they will draw money from the PC budget. "Large organisations will look to lengthen their PC lifetimes by six months (10 per cent) in comparison with 2014, rather than buying less expensive models or removing requirements for key features," said Mr Atwal. "In addition, purchases of optical drives and optional accessories will disappear."

"While we expect large organisations to cut their PC unit purchases by 20 per cent during 2015, due to price rises, small businesses will behave like value-driven consumers and look to purchase consumer PCs instead," Mr Atwal concluded. This will effect resellers, dealers and cloud companies, how many will move to the cloud and thin clients wth software as a service

Egham, UK, 12th May, 2015 —