I was feeling smug about scoring a great Black Friday deal on a Surface Pro 4 last week, but my joy is short lived. There are a number of indicators suggesting 2017 will bring much better price/performance deals to businesses and consumers alike, be it desktop, laptop, and/or tablet. A steady movement of everything to the cloud and brutal competition to hold onto existing market share is likely to drive mainline manufacturers such as Acer, Asus, Dell, HP, and Lenovo to deliver hotter hardware at lower prices or risk being left behind.
Pricing on TVs are my "canary in the coal mine" for lower PC pricing. Consider I can pick up a Samsung 40 inch class 4K Ultra HD TV with smart features, 3 HDMI ports, and 2 USB ports for $300. Vizio is offering a 43 inch class 4K Ultra with Google Chromecast built in for $350; probably not a great deal since you can get the latest Chromecast Ultra as a stand-alone device for $70.
Compare those prices to a stock, no-brains "dumb" monitor - a typical 24 inch to 27 inch 4K UHD monitor with a single HDMI and a DisplayPort Port runs between $330 to $370 on sale, with pricing moving rapidly upward with more display real estate and ports. It may not be practical to put a 40 inch 4K UHD TV on a typical work desktop, and the comparison between TV and desktop display isn't quite apples-to-apples in terms of metrics, but I think you get the point.
Display manufacturers are charging a premium today for a smaller display with some electronics tweaks, at the same time the TV side of the business is dropping prices and adding in more ports and smarter electronics. At some point in the next few years, the "dedicated" PC monitor goes away and is replaced by consumer "TV" electronics, which should simplify manufacturing for consumer electronics companies and stocking shelves at the Big Box stores.
As for the cloud, Chromebooks have continued to stay on the shelves over the years, but the difference between a stripped down Chromebook and an entry-level PC with a hard drive and Windows continues to narrow. Pricing for a Chromebook starts around $180 or so while Intel Celeron laptops with a bundled in subscription of Microsoft Office 365 are at $200. Larger display. more capable CPUs, and hard drive storage drift pricing upward in notches from $250 (Intel Atom) to $350sh (Intel Core i3 class and 500GB to 1TB drive, 15.6" displays).
Depending on who you talk to and the day of the week, a Microsoft Windows license contributes a good chunk of the difference between a Chromebook and an entry level Windows PC, but Microsoft's own move to the cloud may tempt it to start whittling back the price on its operating system. After all, the real "value" in Microsoft apps remains in the core of Office – Word, Excel, Powerpoint, and Outlook. The sheer number of add-ons and plug-ins developed for the business world to get more productivity out of Office gives it an established core of users that will have to be heavily tempted to switch to other alternatives. Microsoft knows that Windows isn't a profit center these days, but an on-ramp to its cloud services bundles and subscriptions.
Finally, new entrants are challenging the status quo. Microsoft's hardware play for higher-end users means traditional manufacturers will have to come up with new designs, features, and lower cost to prevent switching. Huawei entered the laptop market last year and it would like to capture market share as it moves forward, especially since the mobile phone arena is saturated.
Crowdsourcing efforts, such as the Finnish-based Eve V tablet, are also going to provide competition. Eve sold out its initial Indigogo pre-order effort in a matter of hours, offering a better product than the Surface Pro 4 at a lower price. Users will have to wait until February 2017 and beyond to get their new hardware, but the popularity of the initial Indigogo should serve as a warning to existing PC manufacturers locked into a fixed calendar cycle for new product rollout, off-the-shelf sales, price-reductions, and next new model. Some consumers are willing to wait several months for "just-in-time" crowd-designed hardware at the right price point. It should be noted both Microsoft and Intel are working with Eve – another warning sign for traditional consumer manufacturers.
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