[Hexus] How does the weakening pound affect UK technology prices?

1439 Views 35 Replies 23 Participants Last post by Licht, Oct 30, 2008

AOwpr

Discussion Starter · Oct 29, 2008

Quote:

When banks go bust and stock markets go barking mad, the average technology consumer could be forgiven for wondering if, bad though the news is, they have avoided being directly affected by it themselves.

However the latest upshot of Bankageddon is a rapid weakening of the British pound against the US dollar. Last July you could still get two dollars each of your pounds, but by the start of October the exchange rate has dropped to below $1.80. It still managed to stay above $1.70 until a week ago but since then it has dropped rapidly and by close of play today it had dropped to $1.55.

Given that most technology vendors price their products in US dollars it's fair to assume that the GBP price of these products is set to go up. So HEXUS.channel spoke to Elan Raja (pictured), a director at UK etailer Scan, to find out what this means for the channel and for consumers.

"Vendors have announced price increases based on exchange rate fluctuations and we're looking at a 25-30 percent increase," said Raja. "However it's important to remember that a lot of products, like memory, are historically very cheap. It must also be stressed that this isn't a price increase [referring to manufacturing cost] - just an adjustment for the dollar/pound exchange rate."

That's a pretty big price jump. We suggested that this might be a good time to go on a technology buying spree, to get products before the rises filter through. It looks like it's not as simple as that.

"Most distributors revise their prices on a daily basis, so the EDI boys [Electronic Data Interface] have to follow suit," said Raja. "Also, even companies that have inventory at the old price can use â€˜replacement cost pricing', from which they stand to gain."

1 - 20 of 36 Posts

DanNEBTD

· #2 · Oct 29, 2008

memory is historically very cheap? . . they didnt/dont have a DDR system I presume

Mazeppa

· #3 · Oct 29, 2008

Oh good.

shuaib

· #4 · Oct 29, 2008

the prices are going up on many online stores

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beanbagofdoom

· #5 · Oct 29, 2008

I have also seen many prices go up by around 10-20% over here.

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hout17

· #6 · Oct 29, 2008

Damn they are sticking it to you. I hope things get better.

Outcasst

· #7 · Oct 29, 2008

I'd better get that graphics card ordered then

sizeak

· #8 · Oct 29, 2008

Gotta love livin in england....

Dylan

· #9 · Oct 29, 2008

Guess that is why it is called a Global Economic Crisis. America, Japan, England...

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mcogan10

· #10 · Oct 29, 2008

As if PC tech isn't expensive enough in the UK...I feel bad for everyone over there because a rig I build in Massachusetts for $1000 will smoke a ~500 pound rig in the UK.

Evostance

· #11 · Oct 29, 2008

3

Quote:

Originally Posted by Dylan

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Guess that is why it is called a Global Economic Crysis. America, Japan, Englad...

Someones been playing games to much.

Its Crisis not Crysis

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ENTERPRISE

· #12 · Oct 29, 2008

This is ALL due to the Economic crash globally. The whole world is in this together. Its not just the UK. The weakened US economy is what pulled us and Europe down alot quicker.

Money wise I feel alot safer here in the UK than I would ever in the US.

-iceblade^

· #13 · Oct 29, 2008

oh great.

/sarcasm

GeforceGTS

· #14 · Oct 29, 2008

I noticed the prices go up a month or so ago, I found the GTX 280 I wanted Â£270, went to bed, woke up and went to order it and it had gone up to Â£320, the next day Â£330. They went up on pretty much every site I usualy buy from >;l Hence me settling for the GTX 260.. I got a newsletter from Aria.co.uk saying they're putting prices up due to the credit crunch a while back too ;l

First and only way it will ever effect me

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Dylan

· #15 · Oct 29, 2008

4

Quote:

Originally Posted by Evostance

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Someones been playing games to much.

Its Crisis not Crysis

rofl oops

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mcogan10

· #16 · Oct 29, 2008

Quote:

Originally Posted by ENTERPRISE

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This is ALL due to the Economic crash globally. The whole world is in this together. Its not just the UK. The weakened US economy is what pulled us and Europe down alot quicker.

Money wise I feel alot safer here in the UK than I would ever in the US.

Really? I read the Economist pretty regularly (based in England I believe), and I got the impression that the situation in the UK is currently worse than it is in the US.

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s0lz0r

· #17 · Oct 29, 2008

This doesn't make sense.

If you take a product sold in the USA and remove the state tax.

Then add the 17.5% UK VAT.

Then compare it to the price sold it is sold at in the UK.

The product is still 20-40% more expensive.

After the exchange rates crashed, prices are roughly on par with the USA.

This is just a grab for more profit.

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-iceblade^

· #18 · Oct 29, 2008

you're forgetting import costs, sales markups, etc.

it doesn't simply calculate that way, though it certainly does feel like it

.

welcome to the boards: be sure to fill out your specs using your user control panel: doing so will enable us to better help you when you post for advice

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SpuddGunn

· #19 · Oct 29, 2008

Quote:

Originally Posted by mcogan10

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Really? I read the Economist pretty regularly (based in England I believe), and I got the impression that the situation in the UK is currently worse than it is in the US.

Nope, things aren't great what with household bills rising fairly quick and house prices falling (returning to where they should be more like). But its not as bad as people make out at the mo.

Only time will tell

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Joeking78

· #20 · Oct 29, 2008

3

Quote:

Originally Posted by ENTERPRISE

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Money wise I feel alot safer here in the UK than I would ever in the US.

I live in Dubai...I get in paid in pounds, not safe

6 months ago when the UK/UAE rate was 7.5 I was getting 25000 dhms a month, now...I get 20k...so I more or less lost 750 quid a month since the crisis hit

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1 - 20 of 36 Posts

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