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PC prices must rise, not fall, to solve Windows 8's lousy start, analyst argues

Gregg Keizer | Jan. 8, 2013
The holiday slump in PC sales -- down 11% compared to 2011 -- means that PC makers must raise prices, not continue a race to the bottom, an analyst argued today.

"They see it in the sale numbers, customers are telling them that," Baker said. "I think they'll recognize where prices have to be. But more than ever, PC makers have to make the argument that the Swiss Army knife of the PC has value, that it can handle productivity and entertainment that tablets can't quite match yet."

During the holidays, NPD's tracking showed that sales of touchscreen-equipped notebooks broke into four almost-equal parts, with a quarter of sales in the under $500 range, a fourth in the $500 to $700 category, 25% in $700 to $900, and the final quarter priced above $900.

"They're the kings of adaptability," Baker noted of OEMs. "The real issue is going to be patience. Moving into higher prices is something very different from what they've been doing. The business got stagnant, and they were using a big price crutch to sell PCs."

Baker maintained that the shake-up of Windows 8 would be good for the business, although with his "patience" mantra, not immediately.

"Things won't improve, certainly in the first half of the year," he said. Windows 8's next shot at improving PC sales: The back-to-school selling season, which typically kicks off in June and runs through September.

"I think there's still enough optimism [among OEMs] about Windows 8," said Baker.


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