Got Inventory?

Quickly scanning the blogs before I head out the door for work, I came across an interesting article in business week addressing just How Low Can PC Prices Go? Really this is just another example of industry over capacity (this time its in PC hardware) and consumer price deflation. Just like in any other industry that assumed the consumer would be king into infinity, the harsh reality is that consumer demand vintage 2002-2006 has left the building never to be seen again.

On a side note, I want a netbook (preferably the new Apple touch screen netbook please!).

When Jim Wahl bought his first computer back in 1995, it cost$2,500. In December, when the Dallas acquisitions manager bought a Hewlett-Packard (HPQ) laptop for his daughter, he paid just $600. "[In the past], it was a lot bigger decision," Wahl says. "But now, the tires on my car cost more than my laptop."

Personal computer prices tend to fall over time, of course. But in the past few months, computer prices have plummeted much more sharply than the usual 5% yearly declines. In the fourth quarter of 2008 alone, the average personal computer's selling price dropped 14.3%, according to consultancy IDC. Only once in the past 15 years have PC prices declined at a faster rate—in the fourth quarter of 2001, as the Internet bubble burst, when they dipped 14.5%, according to IDC.

And the recent slide may be a precursor to sharper declines ahead. As consumers cut back amid the global economic downturn and the popularity of low-cost computers known as netbooks rises, the computer industry could see a big drop in prices. "We are not done yet," says Rob Enderle, president of consultant Enderle Group. "The drop is going to continue through the year." Matthew Wilkins, an analyst with researcher iSuppli, predicts that average laptop prices could fall a further 10% in 2009, while desktop prices drop 15%.

Read more here: How Low Can PC Prices Go?