HP blames falling pound for PC and server price rises

'mid to high single digits'

By Team Register • Get more from this author

Posted in PC Builder, 11th September 2008 11:53 GMT

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HP is raising UK PC and server prices on Monday, 15 September. But printer and computer storage prices are staying put, for now.

HP blames the falling pound for raising trade prices by "mid to high single digits". This will have a knock-on effect at shop level, once distributors, resellers and retailers add their margin. So end-users will be paying at least 10 per cent more for their kit, come October.

In recent weeks, the pound has fallen about 10 per cent against the dollar. Today, it is trading at $1.75, but some pundits expect the pound to fall even further, to perhaps $1.60. For most of this year, the sterling-dollar exchange rate has been in the high $1.90s. In 2007, the pound traded for much of the year above $2, reaching an absurd $2.11 for a few days in November.

In most sectors, currency-driven prices rises would be par for the course - but computer hardware prices never go up, do they?

HP's price rises come just before the start of the busiest consumer shopping season for PCs and at a time when shoppers are staying away in droves. So bang goes PC World's Christmas.

Where HP leads, other hardware vendors are sure to follow: expect Lenovo, Acer, Toshiba and so on to raise prices real soon.

Dave Poskett, HP director of the solutions partner organisation in the UK and Ireland, today briefed the UK channel on the moves.

“We looked at and the cost of doing business for all the business units and at this stage it has been determined there is a requirement to raise prices for ISS and PSG, but not for the Imaging and Printing Group (IPG) or storage,” he told CRN.

This means that printers and computer storage carry much fatter margins than PCs and servers, and HP is willing and able to absorb some of the sterling loss.

Weirdly, over the summer, three enterprise software vendors, Oracle, VMware and Citrix, raised UK prices, citing a weak dollar. Their reasoning was suspect then; it looks surreal now. ®

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