Vendors hike prices as low dollar bites

Vendors hike prices as low dollar bites

Local tech vendors have been forced to raise prices as the New Zealand dollar continues to slide in value.

The Kiwi fell to a record six-year low of US52.8c earlier this month, as recession angst was felt in markets around the globe.

The local businesses of PC makers Toshiba, Acer and Lenovo have increased prices in recent months, while peripherals specialist Logitech says its distributors have been forced to charge more.

Toshiba country manager Gary Wicks says it raised the cost of most of the company’s locally available products about four weeks ago, with increases varying by model.

The move was purely driven by exchange rate fluctuations, says Wicks. “The killer in our case is really the US to Australian dollar. The exact number escapes me, but I think the difference between eight weeks ago and now is about 25 points. So obviously we just can’t carry that forever.”

Rival Acer says prices rose by about 18 percent across its entire product suite about three weeks ago.

According to country manager Mark Dalton prices are regularly adjusted, but the 18 percent rise was made in line with the dollar’s value. “We had this unusual situation where the dollar dropped through the floor,” he says.

Both distributors and resellers are affected by the price rises, however distributors were able to buy stock at the previous rates in October, which will last them until December, Dalton says.

Across the Tasman, the vendor’s prices were raised by an even higher percentage – 25 percent.

Acer’s Australia-based product marketing manager Bert Noah told Australian Reseller News it could no longer afford to sell stock at the old prices.

“One of the things that channel partners have to do now is really start educating customers in relation to price rises,” he told the newspaper.

Logitech’s Bryan Simpson says of the 200 products available in New Zealand, prices have been raised on only between five and eight items. These products have a high proportion of plastic or copper components in them, so the cost could be reduced if the prices of these commodities falls, he says.

Although its prices for end users haven’t risen significantly here, Logitech’s distributors have had to charge more, Simpson says. “There is no way they can keep on operating as a business by keeping prices as they were three months ago.”

Dean Butchers, country manager for Lenovo, says there has been “upward pressure on prices” as a result of the local dollar’s weakness. However, he says his company continuously reviews prices to ensure it remains competitive.

“Resellers can reasonably expect that from Lenovo and we will continue to adjust to ensure we’re aligned with the market.”

Meanwhile, HP personal systems group marketing manager Warwick Grey says HP has raised prices in the past three months. “[HP is] often making adjustments due to exchange rate fluctuations and the recent drop in the US dollar has resulted in price rises that we have progressively introduced over the past three months,” he says.

Camera maker and imaging vendor Canon is another to have increased prices “in a couple of areas”, according to local managing director Craig Manson.

“[The increases] won’t be across the range, I don’t believe, because there are areas where you can absorb and there are areas where you can’t.”

But Manson warns across-the-board price increases are a possibility. “[Price increases] haven’t come across the board for us yet. That’s not to say they won’t.”

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