Over the past few years, laptop prices have been steadily decreasing. This trend looks set to continue into the foreseeable future. But just how low can laptop prices go? In this article, I’ll take an in-depth look at the major factors influencing laptop pricing and make some predictions about where prices could be headed.
Why Are Laptop Prices Falling?
There are several key reasons why the cost of laptops has been declining:
Component Costs Are Dropping
The components that go into laptops like processors, memory, storage, and displays are getting cheaper to produce each year. For example, SSD storage prices have fallen dramatically, allowing more affordable laptops to ship with fast solid state drives. This directly brings down the retail cost of completed laptops.
Improved Manufacturing Efficiency
Laptop manufacturers have streamlined their assembly processes, supply chains, and distribution networks over time. They’ve found ways to make laptop construction and delivery more cost efficient. These savings translate into lower prices.
Fierce Market Competition
The laptop industry is full of intense competition between many major brands like Dell, HP, Lenovo, Acer, and Asus. This forces companies to aggressively price their laptops to stay appealing versus rivals. More competition generally equals better deals for consumers.
Laptop Popularity
As laptops have become ubiquitous and essential computing devices for many, the massive growth in demand has enabled manufacturers to take advantage of economies of scale. Producing millions more laptops means prices can be lower.
How Low Can Prices Go?
Laptop average selling prices (ASPs) have certainly dropped substantially in the past decade. A $500 laptop today has considerably better performance and build quality compared to an equivalent model from 10 years ago. Here are some thoughts on how much further laptop costs could decline:
Commoditization Places a Floor
There is a baseline cost for laptops based on component prices and manufacturing/distribution costs. Already tight profit margins on affordable laptops indicate we’re approaching the commoditization floor. Brands can only compete so aggressively on price. I think laptops under $300 will be rare, unless deliberately sold at a loss.
Budget Models Get More Capable
We’ll see budget and mid-range models gain more premium features: higher resolution displays, faster memory, better graphics, and backlit keyboards. A good $500 laptop today offers capabilities which used to require spending $800 or more. This trend should continue.
PC Sales Growth Will Slow
The meteoric rise in laptop sales volume can’t continue indefinitely. Market saturation and an overall decline in the PC industry will limit just how low prices can be sustained profitably through economies of scale. Demand may not support sub-$500 average laptop costs.
Varied pricing by category
Mainstream consumer laptops will get cheaper, but niche categories like thin-and-light ultrabooks and premium gaming rigs will maintain higher price points based on performance, build quality, and branding. Not all segments’ pricing will decline in parallel.
Bargain basement Chromebooks
One area where prices will keep falling is Chromebooks. These already affordable cloud-centric laptops minimize hardware requirements. Aggressive promotion of Chromebooks for education and budget buyers will drive prices down further. Don’t be surprised by good $200 Chromebooks.
The Bottom Line
Ongoing improvements in manufacturing and component costs, combined with intense competition, will force laptop brands to keep lowering prices. But don’t expect across-the-board pricing declines. Mainstream Windows laptops around $500 should offer great value. Premium models and niche categories won’t get so cheap. And at the very bottom, basic but usable Chromebooks will get cheaper than ever. If you’re looking for a capable new laptop, now is a great time to shop for one!
