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Context: AI-enabled notebook prices tumble
Average sale prices across Europe have decreased, making the technology a more attractive proposition for users
The wave of artificial intelligence (AI)-capable PCs coming out of the Consumer Electronics Show (CES) has underlined the direction hardware is heading in, and prices have dropped to make the devices more attractive to customers.
This week has seen announcements from Dell, HP, Acer and Lenovo concerning the latest laptop offerings that incorporate AI tools, and that has been accompanied with research from Context indicating that many of the latest offerings are becoming more tempting for users with price points decreasing.
The analyst found that AI-enabled notebook PCs had seen average European retail prices in the UK, France, Germany, Italy and Spain drop by a third year-on-year at a crucial time in the sales cycle.
That decrease, which was spotted in the past few weeks, had the potential to change the approach being taken by the market.
“AI PCs have quietly crossed an important threshold in retail,” said James Bates, senior retail analyst at Context.
“At today’s prices, consumers are not paying for hype. They are paying for future-proofing, better performance and devices that will comfortably last through the next operating system cycle.”
Context’s TotalMarket report, which focuses on sales activity during the peak of Q4, shows that good-quality AI-enabled notebooks are selling for €822, which is a more attractive price for consumers.
Promoting AI
The PC industry is under pressure to promote AI as a reason for upgrades as the power of the Windows 11 transition fizzles out over the next few months.
Given the rushed investments that were made during the pandemic, there is a sizeable volume of users sitting on devices that are tired and failing to offer the faster processing and improved privacy features they are looking for. Add into that AI without the penalty of a price premium, and the package looks a great deal more appetising for customers.
Context is warning that the window of opportunity for customers keen to get an AI-enabled notebook for decent value will not last forever, and that prices will increase later this year.
Pressures on inventory and the fallout of memory price rises will start to filter through and be reflected in average sale prices across Europe.
The challenge for the channel is around striking the balance between going hard with the current pricing and for distributors and resellers to ramp up sales, or to take a more steady approach to ensure there is investment available if a more supply-constrained market – which should be margin-rich – emerges later this year.
“Retailers are effectively being asked to choose between volume today and margin tomorrow,” said Bates. “Pull demand forward too hard and you risk running short when pricing firms up. Hold back too much, and you leave sales on the table while affordability is working in your favour.”
Context indicated it will be keeping an eye on promotional activity through the channel; retailers encouraging buy now, pay later schemes; and how the increasing availability of refurbished notebooks will impact the market and inventory levels.
