Business | Technology
Price erosion will come to a halt
The region's interest in technology is stressed by the number of computer manufacturers and retailers who have businesses established here. Dharmendra Lalai speaks to Gulf News about global and regional prices in the laptop market.
- By Nadia Saleem, Staff Reporter
- Published: 23:30 August 31, 2008
The region's interest in technology is stressed by the number of computer manufacturers and retailers who have businesses established here. Dharmendra Lalai speaks to Gulf News about global and regional prices in the laptop market.
Gulf News: What is the rate of global priceerosion in the laptop market?
Lalai: There are indications, from global auditing companies like IDC, that worldwide price erosion is approximately 15 per cent, year on year. However, in this region, we believe it is not more than 10 per cent.
Gulf News: Why is there a downward pressure on prices?
Lalai: Global prices are decreasing for two reasons. Corporations are looking to increase volumes, which can happen only if the prices become more affordable for consumers. In turn, competitive price reductions by rivals are equally putting pressure on corporations to reduce prices to stay in the game or at least maintain their market share.
Gulf News: How far down can the prices go and what are the alternatives?
Lalai: This has to stop somewhere. You cannot expand market base only on price erosion. There will come a stage where it will not be possible for vendors to drop prices. Even today, there are corporations that are just about breaking even. So price erosion will not continue at the current levels over a sustained period of time. It is bound to stop in the next one or two years.
On the other hand, consumers will have to be attracted by better-priced PCs. Shedding of features and functionalities will be needed to accomplish that. Some of the competitors have introduced low-cost PCs, and this is one way of attracting more consumers without dropping the prices too much.
Gulf News: What changes have taken place in the development of desktops versus laptops?
Lalai: During 2005-2006, development phase for laptop and desktop components saw a huge shift. For example, earlier, the latest processor would be developed for desktops and four to six months later, it would be developed for laptops. But since 2005, the development phase has changed all together. Intel and AMD were instrumental in accelerating this change, especially in this region.
Gulf News: What trend changes do you see approaching in the future?
Lalai: The perception of the industry is changing after the introduction of the low-cost PCs. People believe that the whole industry will move towards low-cost PCs. But we don't think so. Because, right now what low-cost PCs may be offering is something to compliment the existing laptops.
Share this article
More from Technology
More from Business
Popular in Business
-
Budget travel
Airlines in the region
Take a pictorial look at some of the budget airlines in GCC
Business Editor's choice
-
New law to protect investor rights
Dubai land department is studying legislation to protect property purchasers
-
Global Village
Revamped layout featuring four cultures to greet visitors this season
-
Cloud computing is here to stay
Managing security effectively is critical when sharing data over the internet
