More expensive PCs will mean extended PC lifecycles

New research from Gartner says PC prices will be going up by as much as 10 per cent in 2015, leading to significant changes in what PCs we purchase and how long we keep them.

According to the research firm, PC vendors will be forced to raise prices to help offset the effects of currency devaluation in order to maintain already squeezed profit margins.

“We are currently seeing the sharp appreciation of the dollar against most other currencies reflected in companies’ earnings results,” said Ranjit Atwal, research director at Gartner, in a statement. “Device vendors will mitigate the impact of their declining ‘dollarized’ 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. However, vendors’ margins will fall, even as they shift their shipment focus to the regions least affected by these currency effects.”

According to Gartner, in mature markets PC sales are largely price-drive, and through 2016 it expects 30 per cent of PC consumers will purchase cheaper PCs than they would have otherwise.

The price-driven consumers (PCs less than $500) will buy cheaper PCs with lower specifications, accounting for 30 per cent of the market.

Purchasers in the value segment ($500 to $800 PCs) will delay purchases, and account for 40 per cent of the market.

And purchases driven by features ($800+ PCs) will extend PC lifecycles by 10 per cent, accounting for the final 30 per cent of the market.

As for businesses, Gartner predicts they will prioritize other IT budgets with currency-driven shortfalls, particularly software and services, which will mean money taken from their PC refresh budgets.

“Large organizations 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 Atwal. “In addition, purchases of optical drives and optional accessories will disappear. While we expect large organizations to cut their PC unit purchases by 20 percent during 2015, due to price rises, small businesses will behave like value-driven consumers and look to purchase consumer PCs instead.”

Businesses looking to save money by purchasing consumer-grade PCs may find themselves paying more in the long run through, as such PCs generally lack the business-class security and support features businesses need.

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Jim Love, Chief Content Officer, IT World Canada

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Jeff Jedras
Jeff Jedras
Jeff Jedras is a technology journalist with IT World Canada and a member of the IT Business team. He began his career in technology journalism in the late 1990s, covering the Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada and the channel for Computer Dealer News. His writing has also appeared in the Vancouver Sun & the Ottawa Citizen.

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