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A premium PC profit squeeze is imminent as memory prices climb and ASPs decline

Even as the premium PC boom helps rejuvenate sales of PCs globally, gross margin and gross profit erosion is looming for most vendors, according to Technology Business Research, Inc.’s (TBR) 4Q16 Devices and Platforms Benchmark. TBR forecasts a combination of unfavorable supply chain conditions and competition headwinds will force most PC vendors to endure gross margin declines that exceed several hundred basis points year-to-year, and PC gross profits could evaporate by as much as 10% or more year-to-year for some vendors.

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