Consumer Notebooks Are Flying

By John G. Spooner  |  Posted 2005-10-03 Print this article Print

off the Shelves"> HPs HPShopping direct sales arm has been advertising an HP Pavilion a1100 desktop for $249 after rebates and before shipping charges. The site advertised free ground shipping on orders of $250 or higher on Monday. Several computer models were also being offered with no-charge shipping. But many of HPs low-price and mid-price desktops, including the $249 model, were not included in the offer.
Dell, which offers free shipping more sporadically as a part of a revolving series of special offers, was offering no-cost shipping on Dimension desktops priced at $549 or more and Inspiron notebooks costing $849 or higher on Monday. But the offer included a $24 charge for handling.
The two computer companies normally charge $99 for ground shipping for a desktop or notebook. There were also offering numerous perks for SMBs, including rebates and no-charge upgrades to flat panel displays. For its part, Dell will begin offering an additional shipping option on Oct. 10 that allows some consumers to pick up their Dell PC orders at the closest Post Office, a company spokesperson said, although she did not comment on how much the option might cost customers. But where they might wax and wane on shipping charges, PC makers are much less likely to charge more for PCs, especially now when demand for PCs—notebooks in particular—appears to be holding up. At the moment, consumer notebook PCs are "flying off the shelves," at retail Stzeinbaum said, with unit sales growth rates in the 30 to 50 percent range. Desktops have also been moving along with single-digit sales increases, adding up to show little change in consumers behavior thus far. "We have not seen anything like [a slowdown in consumer sales] yet. Theres obviously a concern that there may be a slowdown in purchasing at the consumer level because of these factors," he said. But, while it will watch the market carefully, HP has no plan to change any of its tactics, Stzeinbaum indicated. Due to competition, PC makers are exceedingly reluctant to raise system prices for consumer or business machines. Instead, if there were a slowdown in fourth quarter sales, the immediate reaction of some vendors would be to cut their retail prices by stepping up rebates or increasing assistance to retailers in order to spur demand from holiday shoppers, Baker predicted. "Costs have been going up a lot all over the place for years—on plastics and resins and those types of things, for example. From an OEM perspective, theres always ways to offset those things. I cant think, in the PC market, where theres been a price increase. What [PC makers] usually do is slow the rate of price decline." Ultimately, if component price declines were to slow or reverse slightly, or if shipping costs continued to rise quickly throughout the balance of this year or in the early parts of 2006, PC makers might take action to maintain their system prices. But theyre likely to resist raising them, analysts predicted. "PC vendors will go through all sorts of unnatural acts not to raise prices," said Leslie Fiering, an analyst with Gartner Inc. "PC vendors are reluctant to raise prices. What theyll do is keep prices flat and de-feature the systems or find some other way to pick up the slack." Often the manufacturers try to bury a price increase by padding shipping charges or by cutting down features, such as RAM allotments, hard drive sizes or the length of a systems standard warranty, she said. Thus, "Bottom line [price] would be raised, because you would have to add all these things back in. But system prices, which is what everyone looks at, would not be affected," Fiering said. However, Fiering added, "We havent seen it yet." Check out eWEEK.coms for the latest news in desktop and notebook computing.

John G. Spooner John G. Spooner, a senior writer for eWeek, chronicles the PC industry, in addition to covering semiconductors and, on occasion, automotive technology. Prior to joining eWeek in 2005, Mr. Spooner spent more than four years as a staff writer for CNET, where he covered computer hardware. He has also worked as a staff writer for ZDNET News.

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel