Tuesday, October 5, 2010

PC giant brewing group prices: Three reasons support



Lead: Acer recently vice president and general manager of Taiwan operations headquarters to Shanghai Commercial News Linxian Lang said that the recent panel, DRAM costs, prices for a lot of pressure laptop and notebook computers are brewing "contrarian prices."

Similarly, ASUS also has some echoes. Asustek Computer chief operating officer, said Tony Chen, the Shanghai Commercial News, even though prices of laptops are not, at least the price decline gradually slowdown.

Computer prices far-fetched it?

Body:

Reasons for a price increase

The darkest moment in the history of

Lenovo, Asus performance loss, Hewlett-Packard, Dell dropped the performance, it was said that now is the PC industry's darkest period.

By the end of May, Lenovo Group's 2008/2009 annual financial reports to hand over the full year net loss 226 million U.S. dollars, is not only the largest association in the history of losses, but also its first full year loss in 10 years. Lenovo's predicament is the PC industry, "winter" true portrayal. Examine the financial statements under the association, the data show: one in January ~ March of this year's fourth quarter loss was 264 million U.S. dollars, this is a fiscal year loss of 226 million U.S. dollars for important reasons. Black hand behind this is of course the biggest global financial crisis triggered by the weak consumer demand.

Lenovo not only from last year, almost all the world's PC giant is mired in a slowdown, falling profits quagmire.

Asustek Computer announced fourth-quarter results of 2008, net loss of 2.798 billion Taiwan dollars (about 82.24 million U.S. dollars), the company set up its first loss in 19 years. Net profit of NT compared with 7.23 billion yuan last year fell 93.7%.

The most direct competitor Lenovo Acer's consolidated revenue in the first quarter of about 3.54 billion U.S. dollars, net profit of 60.29 million U.S. dollars, down 31.2% over the same period last year.

HP, the world's oldest PC in the second quarter (February 1 ~ April 31) net profit fell 17%, which is mainly responsible for PC business of personal systems group revenue was 8.2 billion U.S. dollars, down 19% year on year, operating profit 374 million U.S. dollars, up more than 30% down also.

Founder Technology announced fiscal year 2008 net profit fell more than 40%, HEDY Computer fiscal year 2008 revenues fell 32.71%.

Affected by downstream manufacturers, even the processor giant Intel's first quarter revenue also fell 26% year over year, net profit is down 55% as much as the financial crisis impact was so strong, has exceeded industry expectations.

Reason 2 prices

Upstream parts prices

It is understood that the memory, hard drives are in the prices, but gains were less than 5%, for the time being does not significantly affect the PC.

The cost of LCD panels in PC machine account for about 30%, is the single highest proportion of parts, if the LCD panel prices to increase 20% to 30%, then the price is bound to be up computer. From the industry to provide a data, in May there is indeed a liquid crystal panel transaction price rose slightly, but the 5% price increase should not have much of the terminal.

From a professional IT media editors have expressed their views, the panel will not be up limited impact on the market, the market should also be concerned that the CPU price changes as INTEL CPU market was almost monopolized by the situation makes the company lost its bargaining rights. PC makers are held by margins almost INTEL hands.

Reason 3 prices

Selling computer than to sell Chinese cabbage

In point of agricultural products wholesale market approval cabbage, and then sold to small farms, low gross margin of 30% is 100% higher. The profits of selling the computer to be much lower. With the sudden emergence of Acer Netbook Shipments in 2008 more than 50% growth is expected in two or three quarters later than the Dell, and advanced to the second-largest computer maker. However, Acer's profit? Tell embarrassment, gross profit margin of 6%, 7%, net profit is only about 2% -3%.

Running capacity, making small profits is a common problem in this industry. Dell's fiscal 2009 revenues at 61 billion in earned 3.6 billion U.S. dollars, net profit of only 6%.

Huge investment, the outlook uncertain. Many PC makers have been unable to support, brewing out of the market. Japanese electronics maker NEC has well-known to the outside world, said it would withdraw from Japan's PC market. NEC has already announced its withdrawal from Africa, Europe and the Middle East market, decided to quit the Japanese market starting from July this year, implementation. NEC's decision to exit the PC market, largely based on the current poor economic situation and poor business conditions made. In the last fiscal year, NEC's losses reached 2.96 billion U.S. dollars, and even lay off 20,000 people worldwide since it is still impossible to improved performance.

Currently, NEC is still Japan's best-selling PC brand manufacturers, it sold in the country up to 2.5 million computers a year. But in other countries, NEC in large PC manufacturers and global meet Shique little bit competitive.

The operation of the market economy has its own laws, the company must find a way to make money for long periods, or simply out of the market, or to develop new re-planning the layout, or price increases to maintain normal operation of enterprises. From the PC industry's waning status of view, prices may indeed be forced quite upset.

Fanfangguandian:

Supply and demand determine market price

Prices easier said than done

PC business reason prices seem very good, but prices rose the most crucial factor is not still depends on market supply and demand. PC products is still a buyer's market, prices easier said than done.

According to research firm Gartner recently released data show that in the first quarter, global PC shipments of 67.2 million units, down 6.5% year on year. China's hardware market, Gartner principal analyst, said Ye Lei, from the major economic environment to see, PC industry growth in 2009 is expected to remain difficult, and may even still be down. JP Morgan also recently released report, the global economic recession curbed demand and prices, the global PC market in the third quarter of 2009 to recover after the expected PC sales in 2009 than in 2008, down 5%, PC sales than 2008, down 13%.

Shrinkage of the overall PC market, is an indisputable fact.

Acer's price increase is likely to become a "name? 鍛?Alexandra it." The Acer is a company must understand the price increases mean. If because of the expense of market share, improve profit margins, would be "harm than good."

Edit Comment:

The father of economics, Adam Smith once said: "Industry giants get together, if only drink tea, chat, and finally harm the public interest is always to reach consensus for the results." His book "The Wealth of Nations" There is such a classic in the observation: "in the same few people together, but their talks are not planning a conspiracy against the public is to cook up a scheme to deceive the public to raise prices." However, the benefits of competition is usually nothing came of this plan.







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