[photopress:it_laptop_manufacturing.jpg,full,alignright]Global retail prices for laptop computers are set to rise as contract manufacturers seek to raise prices in the face of rising raw material and assembly costs.
PC users worldwide have become used to falling prices throughout the past decade however, the so-called ‘China effect’ on global manufactured goods prices is ending.
The Financial Times reports that Quanta, Compal and Wistron, the world’s three largest notebook contract manufacturers by output, are in talks with their customers – Hewlett-Packard, Dell and Acer – on how to share the burden of rocketing prices for key materials. Labour costs in China, where the manufacturers have their main production bases, are also rising.
Ray Chen, chief executive of Compal, said, ‘We will be raising prices for the first time.’ His company expects to account for 25% of the global market this year.
Ray Chen said, ‘In the past, we, the contract manufacturers, were always forced to absorb upward price pressures. But the prices for key materials such as copper and plastic resin and the cost of labor in China have been rising so much that it doesn’t make sense for us to continue lowering prices.’
Quanta, Compal, Wistron and smaller competitors design and assemble most notebook computers, which the top PC companies sell under their own brands.
While contract manufacturers have seen their profits squeezed in recent years, they have been unable to get price rises accepted by the the branded vendors.
However, it is reported several of the branded PC companies have agreed to share part of the burden, recognizing that the entire supply chain is clamoring for price rises.
Source: FinFacts Ireland