Price Forecast: Desktop Computers

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Recent Price Trend - Desktop Computers


The average price of desktop computers has been falling at an estimated average rate of 4.5% annually in the three years to 2017, driven mainly by suppliers’ falling input costs and rising competition from substitute products. Prices for computing hardware, one of the main components of desktop manufacturing, have been in a long-term state of decline as rapid technological advances have made semiconductors and electronic components cheaper from year to year. Software, another key input, has also fallen in price due to heavy competition from open-source and free alternatives. As a result of these falling input costs, suppliers have been able to lower desktop prices while maintaining their profit margins, to the benefit of buyers.

Demand drivers for desktop computers have also trended in buyers’ favor. For example, vendors have been forced to lower prices due to rising demand for substitutes, such as laptop computers, tablet computers and smartphones. Demand for these devices has grown in line with the number of mobile internet connections. Smartphones and tablets in particular have rapidly penetrated the market due to their convenience and unique functionality. Users can easily access these devices at various locations, and many of them have mobile broadband capabilities that provide users with constant online access. As demand for these devices has risen, demand and prices for desktop computers have fallen accordingly.

Although these factors have worked in buyers’ favor, the expanding economy has limited the rate of decline in computer prices. The number of businesses has been growing in the past three years, while consumer spending has risen as well. As a result, businesses and consumers have been somewhat more likely to procure desktop computers, placing slight upward pressure on market demand and prices. Meanwhile, intense market competition has been forcing most suppliers to decrease prices at a similar pace in order to remain attractive to buyers, leading to low price volatility. Low price volatility benefits buyers by making it easier for them to accurately anticipate future costs.

 



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