Price Forecast: Laptop Computers

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Recent Price Trend - Laptop Computers

The price of laptop computers has fallen at an estimated annualized rate of 4.3% in the three years to 2017. Market prices have been steadily falling for more than a decade, due in part to the reduction in computer hardware and software costs in accordance with an observation referred to as Moore’s Law. Moore’s Law states that the number of transistors on an integrated circuit doubles every two years due to technological advances, which results in cheaper production costs for suppliers. Additionally, software prices have fallen with the introduction of more advanced programming languages and developer tools. Because most laptops are priced according to the cost-plus model, drops in hardware components and software licensing costs have led to an overall decline in laptop prices.

Demand trends have had a mixed effect on price during the three years to 2017. Growth in per capita disposable income and private investment in computers and software has led to rising consumer and business demand for all computing goods, including laptops. However, this demand has been mitigated by the exploding popularity of smartphones and tablets. Prior to the introduction of smartphones, buyers with mobile computing needs could only buy laptops; now buyers have more choices, and laptop vendors have been forced to lower their prices to hold on to their share of buyers in the face of the fast-growing tablet and smartphone markets.

Input cost stability has allowed vendors to accurately forecast their overall operating costs in the past three years; which has in turn yielded steadily falling laptop prices. Low price volatility benefits buyers because it helps them better anticipate price trends, and allows them to take their time in purchasing decisions.


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