Home > Windows > PC Pricing to be Aggressive to Grab Volumes

PC Pricing to be Aggressive to Grab Volumes

June 22nd, 2013

Aggressive PC Sales PricingRecent industry developments point to growing pricing competition risks within PC OEMs. Dell has shifted its PC strategy from profit protection to market share gains. Dell’s strategic move to PC volume growth and HP’s weaker PC profitability in the recent quarter lead us to conclude that US OEMs will adopt aggressive pricing to protect PC market share. Dell’s management suggests that it might adopt a more aggressive pricing strategy to increase shares in key accounts that should provide solid cash flow and profitability for Dell over the long term. The increasing price competition risks could cap Asian PC OEMs’ margins from further expansion.

Compared with PC OEMs, we think NoteBooks [NB] ODMs are in a better position to defy the negative PC pricing trend on more concentrated market share structure. We expect most NB OEMs (except Apple) to launch NB with different casing designs such as carbon fiber, glass, metal and plastic casing to differentiate their products and catch consumers’ eyes. Thus, we think the trend should benefit casing suppliers with one-stop-shop services and support at the group level. For NB battery packs, we think the impact of the detachable NB battery pack design is the key topic to watch in 2013. It could increase the addressable market if we see two battery packs for one detachable NB (such as Asus’ transformer) but could be negative if PC brand names are using more single cell pack designs.

HP Management indicated that as they navigate this transition they need to remain focused on the balance between profitability and market share. But it’s important to acknowledge that pricing continues to be very competitive. They plan to continue to take action to improve our margins in personal systems as we go through fiscal year 2013.

Categories: Windows Tags:
Comments are closed.