Thursday, 6 June 2013

Large increase in the prices of laptops and tablets threatening as Rand dives to its weakest level against the dollar in four years

The Rand is at its weakest level against the dollar in four years - and while this might be good news for South Africa’s export and manufacturing industries - this could well play havoc with prices in the computer industry, with at least one laptop retailer, The Notebook Company, saying that prices of laptops and tablets are likely to rise by 10%.

The Rand has pressed through the physiological R10 to the dollar exchange rate for the first time in four years, sparking fears that technology companies sourcing their products in dollars would have to institute increases.

“With the weakness of the Rand, we can no longer absorb our higher dollar-based costs. We will have to start increasing prices, immediately, and the price increases could be as much as 10%,” said Christopher Riley, CEO of  Pretoria-based laptop and accessories retailer, The Notebook Company.

“We have been trying to absorb the currency hits, but this is no longer possible,” he said.

He said Apple iPads account for a high percentage of sales at The Notebook Company, so the need to increase prices by as much as 10% was “not a decision taken lightly”.

It is expected that many technology companies – certainly those who deal  in dollars – are going to have to increase prices, across the board, said Riley.

“Few companies will be able to absorb the weakness of the Rand – and this, too, might not be an overnight thing.”