Personal Computing Procurement Intelligence Report, 2024 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)
- Published Date: Apr, 2024
- Base Year for Estimate: 2023
- Report ID: GVR-P-10584
- Format: Electronic (PDF)
- Historical Data: 2021 - 2022
- Number of Pages: 60
The pricing and cost analysis helps in deriving and projecting the actual cost of products or services over the forecast period. It considers all the cost components and provides a competitive advantage during supplier negotiations. Moreover, the outcome helps procurement leaders understand detailed and fact-based cost drivers for the category.
In this Personal Computing procurement intelligence report, we have estimated the pricing of the key cost components such as raw materials and electronic components, labor, equipment, packaging and labeling, logistics and supply chain. Other costs include R&D, rent and utilities, licensing and compliance, sales and marketing, general and administrative, and taxes.
Suppliers of personal computing products often use one of many pricing structures. One of the prominent pricing structures used is cost-plus pricing. Key benefits of this pricing model include simplicity of calculation, consistent rate of return, and dependability. Other key pricing models used in this industry are bundled pricing, competition-based pricing, demand-based pricing, and penetration pricing. According to data published by Federal Reserve Economic Data (FRED), the Producer Price Index (PPI) of semiconductors and other electronic component manufacturing increased from 56.73 in June 2023, to 57.84 in January 2024, indicating that the selling prices of these items as perceived by the producers have risen during this period. The costs associated with logistics and supply chain were considerably high at the end of 2023 and early 2024, due to geopolitical conflicts, Houthi vessel attacks, port congestions, and shipping delays. Freight rates between North America and Asia increased by 173% at the end of January 2024 as per the latest Freightos estimates. Rates double between the Mediterranean and Asia routes as many carrier companies increased their rates from USD 500 to 2,700 per container.
Key factors affecting personal computing product prices include fluctuations in the prices of raw materials and electronic components, supply chain and logistical challenges, labor cost variations, and licensing and compliance needs. Common raw materials include plastic, glass, metals, aluminum, arsenic, and silicon, and their prices vary based on various parameters. For instance, the prices of plastic are dependent on commodities such as crude oil and natural gas. Similarly, costs of electronic components such as semiconductors and batteries may fluctuate based on several parameters. For instance, in 2023, several key suppliers were faced with a global chip shortage due to the U.S.-China tech war and geopolitical conflicts. This led to a rise in semiconductor prices and led to delays in product manufacturing. Since 2022, the chemicals used in chip manufacturing have increased by 10 - 20%. Similarly, the labor costs for this chip manufacturing have increased especially in the U.S. and European regions in 2022 and 2023. As a result, final product prices such as computers or tablets have increased by almost 15 - 25% between 2022 and 2023.
Every company and its procurement unit look to bargain for the best deal while procuring a set of products or subscribing to a set of services. Rate benchmarking comprises price/cost comparison of multiple sets of products/services to assess the most effective combination that can potentially assist the procurement team in getting the optimum rate.
The average prices of personal computing items in the U.S. vary according to the type of product. For instance, in 2023, the average prices of laptops in the U.S. were in the range of USD 200 - USD 2,400. The average prices of desktops were in the range of USD 180 - USD 2,100. The average prices of tablets fell within the spectrum of USD 100 - USD 900. Moreover, prices also vary according to geographical location. For instance, in 2023,office laptops of low- to mid-range specifications spanned in the range of USD 200 - USD 950 in the U.S., and fell within the range of USD 300 - USD 1,150 in the U.K. Moreover, such laptops fell within the spectrum of USD 200 - USD 750 in China.
According to data published by the ‘U.S. Bureau of Labor Statistics’, the average industrial electricity prices in the U.S. increased from USD 0.168 per kWh in February 2023, to USD 0.173 per kWh in January 2024. On another note, as per data published by ‘The World Bank’, prices of natural gas increased from USD 9.55 per MMBtu in July 2023 to USD 11.51 per MMBtu in December 2023. These factors led to an increase in the raw material costs for personal computers during these periods, which ended up raising the prices of the same.
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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.
According to our research, Project Managers working in Acer Inc. and Lenovo Group Ltd. receive a 10% - 15% higher base salary as compared to the salary received by Project Managers working in Dell Inc. and HP Development Company, L.P. However, the year-on-year increment rate majorly depends on the Key Result Areas (KRAs).
Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the Personal Computing industry over the last two years:
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In January 2024, Dell Inc. announced the launch of a new series of its ‘XPS’ laptop line. These laptops have minimalistic design features and superior display resolutions such as Full High Definition (FHD), Quad High Definition (QHD), and Ultra High Definition (UHD). Moreover, they also have seamless glass touchpads, larger keycaps, and OLED touch options. The launch of these products facilitated Dell to strengthen its product innovation and design capabilities and facilitate a superior display experience for customers.
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In October 2023, Apple Inc. launched a new series of its ‘MacBook Pro’ lineup of laptops. These laptops have a novel Graphics Processing Unit (GPU) and Central Processing Unit (CPU) architecture, thus enabling superior display and speed functionalities. Moreover, these laptops also have enhanced battery life, improved camera, unified memory support, and advanced connectivity features. The introduction of these products enabled Apple to provide customers with top-of-the-line features and capabilities.
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In September 2023, HP Development Company, L.P. launched a new product named as ‘Spectre Foldable PC.’ This 3-in-1 device is capable of switching between laptop, desktop, and tablet. It has enhanced portability and flexibility and is also equipped with attributes such as a wireless charging keyboard, OLED display, and built-in AI-based security features. The launch of this device enabled HP to augment its range of innovative products and enable an improved hybrid experience for customers.
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Add-on Services
Should Cost Analysis
Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Rate Benchmarking
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Salary Benchmarking
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
Supplier Newsletter
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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