By Quentin Fottrell
While Intel says its supply woes are eating into earnings, analysts say they’re also dampening holiday deals on computers.
The semiconductor company warned today its fourth-quarter results will likely be lower as a result of the shortage of hard drive components stemming from flooding in Thailand earlier this year. These supply issues have also diminished the discounts typically offered for PCs this time of year, experts say. “Prices for the consumer haven’t risen, however, because discounting is so prevalent during the holiday shopping period,” says Dan de Grandpre, CEO and editor-in-chief of DealNews.com. “Once the holiday season ends, expect discounting to decrease, which is an effective price increase.”
To be fair, PCs were already selling at lower prices to help stave off the move toward mobile technology and away from traditional computers, experts say. “They’re cheap enough already,” says Kim Caughey Forrest, vice-president and senior equity at Fort Pitt Capital in Pittsburgh, Penn. “Tablets are popping up on consumer’s radar. PC demand among consumers had been declining.”
Intel’s supply issues may have accelerated the growth of tablets, says Adam Hanft, CEO of marketing and branding firm Hanft Projects. “The irony is that the flooding is creating worldwide PC shortages precisely at a time when the tectonic shift from PCs to mobile devices is inexorably racing forward,” he says.
The hard drive shortage might also be a boon for alternative storage technologies such as solid-state drives like the ones used in the MacBook Air, as well as cloud-based computing, de Grandpre says. “Cloud storage is still dirt cheap,” he says, “so consumers can get by on smaller hard drives and use the cloud to store files and media.”