What affect does exchange rates have on hardware prices?

[Dark Light]

I was just wondering what affect exchange rates have on hardware prices. The drop in the Euro has caused an increase in the Dollar for example, so does that mean that hardware will be cheaper or more expensive here. For example the Titan X is $999 in the US but the cheapest here is £870, I know we have always not had great deals in the UK, but £870?

 

[cainer]

i think it was worked out in the gfx forum that after adding VAT and shipping that $999 equates to around £820, so, £50 mark up/profit for the shop, bare in mind a lot people (forum members) will get it shipped to them for free and get some Haribo chucked in as well

 

[Christmas themed thank]

Well it's affected OnePlus...

 

[Dark Light]

i think it was worked out in the gfx forum that after adding VAT and shipping that $999 equates to around £820, so, £50 mark up/profit for the shop, bare in mind a lot will get it shipped to them for free and get some Haribo chucked in as well

But that is my point, is it USD that affects the price, or is it other currencies? For example in the Eurozone prices will see a massive increase, USD\EUR was around 1.38 a year ago and now it has been as low as 1.04. Which has meant that the fall in the Euro has caused a massive increase in the Dollar (since people transfer into a "safe" currency), so most regions outside the US will see an increase. If it is just straight USD exchange rates then people in the Eurozone will see prices increase around a third. So that this mean that A) it is USD that affects the prices and B) with the massive increase in the Eurozone will that mean that US manufactures decrease there prices for outside US for mainly Europe, of which the UK might see some of it.

So basically, will the mess in the Eurozone from Greece and QE affect the price we pay for hardware over here?

 

[joeyjojo]

I've always assumed that big corp's just price stuff based on the market. E.g. Apple know their target market in the USA will pay $x for a given laptop and the market in the UK will pay £y for the same thing, where $x != £y. It depends on how much disposable income people have in various places.

So my answer would be... not much.

 

[Dark Light]

I've always assumed that big corp's just price stuff based on the market. E.g. Apple know their target market in the USA will pay $x for a given laptop and the market in the UK will pay £y for the same thing, where $x != £y. It depends on how much disposable income people have in various places.

So my answer would be... not much.

So therefor the exchange rate is irrelevant? So why is the Titan X so much more expensive compared to other hardware in terms of USD\GBP?

The original Titan for example, which was released when the Dollar was stronger: http://forums.overclockers.co.uk/showthread.php?t=18490481

 

[cainer]

So basically, will the mess in the Eurozone from Greece and QE affect the price we pay for hardware over here?

no, even if it OcUK (Caseking) bought them in Euro's, that would then convert back into Sterling at our nice exchange rate so it would make no difference for UK buyers
that $999 price tag will still have sales tax added to it for the vast majority of US buyers

 

[dowie]

So basically, will the mess in the Eurozone from Greece and QE affect the price we pay for hardware over here?

Are you paying for your hardware in euros, are you buying it from retailers in the eurozone? Do the retailers you use source from wholesalers or manufacturers in the eurozone?

Answer to your question is perhaps, maybe etc..

A falling EUR makes stuff from the eurozone cheaper for people in the UK to buy, but if that stuff being bought from the eurozone is first imported from elsewhere then....

 

[Dark Light]

Are you paying for your hardware in euros, are you buying it from retailers in the eurozone? Do the retailers you use source from wholesalers or manufacturers in the eurozone?

Answer to your question is perhaps, maybe etc..

A falling EUR makes stuff from the eurozone cheaper for people in the UK to buy, but if that stuff being bought from the eurozone is first imported from elsewhere then....

Yes but that is my point, is it USD that matters. I know most hardware companies are American, but a lot of there R&D is outside the US and I would imagine all their factories is outside the US as well.

 

[dowie]

insert USD/America in place of EUR/eurozone in the previous post

are you buying components from the US etc..etc..

though why are you talking about the eurozone and Greece in that case? Tis the GBPUSD rate you're more interested in

 

[Surveyor]

Most prices are going up, look at CPUs, 4790k retails were around £250 a couple of months ago, they are now closer to £300 than they are to £250.

Discounts at such times come normally from a distributor or manufacturer doing deals based on volume or clearing aged stock.

But when GBP weakens like it has done last couple of months does make it harder. Of course if GBP regains strength it makes future replenishing lower cost which eventually filters into pricing and if a deal is done at same time as GBP has strengthened then that is like double whammy which can help give a far greater price reduction.

£799 is absolute best case, final price is still undecided, unfortunately if they had launched this 3-4 weeks ago it would have being:

$999 / 1.55 = £645*1.2 = £775 so £799 was possible a shipping would be about $10 per card.

Unfortunately rate has being plummeting last few weeks:

$999 / 1.47 = £679*1.2 = £815 and then add shipping.


So if NVIDIA price it at £799 in the UK, they will be doing a great job, reality is that is the absolute very best you can expect, it is far more likely to be between £799 - £999 as I originally suggested, so £899.


P.S. Just to really upset things, at 980 launch GBP was even stronger, so would have being $999 / 1.64 = £609*1.2 = £730, so if we had those rates now hell £749 could be possible.

 

[Dark Light]

insert USD/America in place of EUR/eurozone in the previous post

are you buying components from the US etc..etc..

though why are you talking about the eurozone and Greece in that case? Tis the GBPUSD rate you're more interested in

My point is that Greece and other things has caused the Euro to loss quite a lot of it's value, which has meant that currency has flowed from the Euro to the Dollar, which means that the Pound appears weaker against the Dollar.

 

[Jacksonn]

The state of the US dollar will always effect prices of things world wide.

 

[dowie]

My point is that Greece and other things has caused the Euro to loss quite a lot of it's value, which has meant that currency has flowed from the Euro to the Dollar, which means that the Pound appears weaker against the Dollar.

there are plenty of things that affect the GBPUSD exchange rate... you'll have also seen flows from the eurozone to the UK too

but yeah the dollar increasing relative to the pound would make things originating from the US more expensive

 

[Dark Light]

So to answer my own question, the mess in the Eurozone does mean we have to pay more for hardware.

 

[dowie]

not necessarily no, there are multiple factors affecting exchange rates

the GBPUSD rate going down means if you're located in the UK and buying from the US then that stuff in the US is costing more

 

[joeyjojo]

So therefor the exchange rate is irrelevant? So why is the Titan X so much more expensive compared to other hardware in terms of USD\GBP?

Just thinking aloud. It probably does impact retailers like ocuk (as explained in the posts above) because stock is probably ordered in $. I was thinking more for multinationals who produce stock for various regions.