Computer buyers shrug off price hike

Despite higher computer prices, consumer demand has not declined as IT products have become resilient economic necessities, say retailers.

Buyers are shifting towards premium models as entry-level goods wane, said leading IT retailers and the organisers of the Commart trade show, while others are "panic buying" before prices rise even further.

Takon Niyomthai, investor relations manager at IT product distributor Com7, told the Bangkok Post retail prices surged by 30-50% in the first half of this year.

"This uptick was primarily driven by the cost of memory components, which skyrocketed by 200-300%," he said.

Popular brands including Apple recently announced price adjustments for products.

Despite these steep price hikes, sales for Windows PCs and Android smartphones have not declined, as consumers buy them "out of necessity" to access new technologies such as artificial intelligence (AI), and to keep up with standard upgrade cycles, said Mr Takon.

"In fact, the anticipation of further memory price increases has prompted some consumers to buy devices earlier than planned to lock in current prices," he said.

Premium Products

The market dynamic now heavily favours the premium segment. While the total number of IT units sold has dipped by around 5%, the premium market segment grew by 30%, resulting in an overall revenue increase of roughly 15%.

Conversely, entry-level products face severe supply shortages. Devices that used to serve the budget market, such as older Apple models costing less than 20,000 baht, are essentially out of stock, pushing the new entry-level barrier to more than 20,000 baht.

The cost of standard entry-level phones also surged to around 5,000 baht from 3,000 baht.

Mr Takon said the rising costs affected specific computer categories, with high-end AI workstations now extremely expensive.

"Standard AI PCs, which might have cost 25,000 to 30,000 baht at the beginning of the year, are now priced between 35,000 and 40,000 baht during the second half," he said.

In addition, the do-it-yourself PC building market has noticeably dropped, particularly in the 30,000 baht mid-range segment, as the inflated prices of memory and solid-state drives propel the cost of custom builds, said Mr Takon.

Apple customers are considered to be the least price-sensitive. Instead of switching to a cheaper Android or Windows alternative, they are more likely to simply downgrade among Apple products, such as opting for a MacBook Air instead of a MacBook Pro, he noted.

Second-hand market

Mr Takon said the second-hand market is thriving because of tighter consumer budgets.

Smartphones are the most popular second-hand items, followed by tablets, with iPhones the top choice, he noted.

Com7 maintained its annual targets of 10% revenue growth and 15% profit growth, bolstered by a first-quarter performance that exceeded expectations.

"Our business performance indicates people who must buy devices are still doing so," Mr Takon said.

Panic Buying

"This year IT product prices have continued to rise, and they are expected to keep increasing into next year," Kasame Srilertchaipanij, vice-president of marketing at IT City, told the Bangkok Post.

"However, we have not seen demand decline, nor are consumers delaying purchases. People are still buying, driven by AI-enabled devices and the fear that prices will continue to spike later, which is driving panic buying among users. Although prices are rising, the industry's gross profit has not improved much due to high costs and intense competition."

IT City diversified into project-based sales by providing more consulting services to help users maximise productivity with AI-enabled PCs.

At the Commart Ultraforce event, IT City is hosting a lucky draw worth a few hundred thousand baht. The event runs from July 2-5 at Bitec.

Commart will be a key indicator of purchasing power trends in the second half of the year, Mr Kasame said.

The IT retail market this year is expected to remain flat, he said.

Pornchai Jantarasupasang, media and event director at ARIP, the organiser of Commart Ultraforce, said the profile of Commart attendees includes high purchasing power, with average spending of 40,000 baht per visitor.

"Complete product prices will increase by 10% compared with the March event, in addition to component price hikes for chipsets and hard disk drives," he said.

The best-selling products at the trade show are expected to be AI PCs ranging from 30,000-40,000 baht, said Mr Pornchai.

He estimated transactions at the event at 3 billion baht, similar to the March edition.