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Rising Component Costs Hit Notebook Computer Makers

Rising Component Costs Hit Notebook Computer Makers

by , 1:00 PM EDT, May 8th, 2008

Rising prices for raw materials, metals and plastics as well as new labor laws in China are set to raise the price of notebook computers made by branded computer vendors such as Hewlett-Packard, Dell and Acer, according to the Financial Times on Wednesday. The effect on Apple is not yet known.

Quanta, Compal and Wistron are the world's three largest contract manufacturers. Apple has done business with Quanta.

"We will be raising prices for the first time,” said Ray Chen, chief executive of Compal, which expects to account for 25 per cent of the global market this year.

Those higher prices for cobalt, nickel and added costs due to new labor laws and tax rules in China are expected to be passed on to consumers.

“This time, the industry can make a case because makers of components such as batteries, panels or memory chips, which in some cases the branded vendors source directly themselves, are sending the same message,” said Chris Wei, an analyst in Tapei with the Institute for Information Industry.

The article did not mention Apple, and Apple has shown itself to be very good at negotiating favorable pricing in the past. What the effects will be on Apple is not clear at this point, but they certainly bear watching.

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