PC vendors' bets on premium devices set the stage for a PC price war
Dell Technologies’ (NYSE: DVMT), HP Inc.’s (NYSE: HPQ) and Lenovo’s all-in bets into the premium PC space, the most coveted in the PC market due to greater profit per sale and strong customer loyalty, have rejuvenated the global PC market, but as the midpoint of 2017 approaches, cracks in the façade are becoming visible. Declining PC average selling prices (ASPs) and a larger roster of stronger competitors vying for greater share of a recovering market are signals that a price war is imminent. While vendors aim to sustain unit shipment growth by lowering ASPs, which fueled the recovery of leading vendors’ PC businesses, the strategy is risky. It could potentially erase the PC market’s short-lived revenue recovery and drive vendors’ PC businesses toward the red as they concede profit to sustain market share growth, if not force some vendors out of the business altogether.