Increases in GPU prices

[h4rm0ny]

You did not read my bigger post showing that we pay the same price in usd with the americans with the fluctuation of the pound between $1.27 to $1.32 making the net value of the £600 card $633 - $658, and in USA the cheapest GTX 1080 goes for $649.99 while most of them $700.
(Net value = gross - vat)

Simple maths

I read all of your post. I commented on the part where you threw in 15% as "a healthy margin". Again, do you work in importing computer components, because that is way off from what I think. You are fond of saying "simple maths". But x + y can be simple and still wrong.

If you're going to make an argument then you can't have key parts of it just be hand-waved figures you feel are right based on no experience. Especially when they contradict what people who DO work in the industry are saying. Furthermore, your choices of pound values in your example: 1.27 and 1.32 are very poorly chosen and your argument ignores lag in prices as well. You say "simple", I say "simplistic".

 

[h4rm0ny]

many of you seem to have missed that we've been paying higher prices for tech for many years. It was never due to any kind of currency exchange rate. A lot of times the price in dollars is almost similar to the one in pounds.

Irrelevant to the argument that recent price rises are or are not to do with the fall in the pound, however. Product prices vary from nation to nation because they're based in part on what people are willing to pay. Britain is a richer nation per person than India, therefore a company can get away with charging more for a product in Britain. But that doesn't mean that it is "a myth" that a falling pound increases the price of foreign goods, it is a distinct factor.

 

[Griffildur]

Irrelevant to the argument that recent price rises are or are not to do with the fall in the pound, however. Product prices vary from nation to nation because they're based in part on what people are willing to pay. Britain is a richer nation per person than India, therefore a company can get away with charging more for a product in Britain. But that doesn't mean that it is "a myth" that a falling pound increases the price of foreign goods, it is a distinct factor.

no one said it's a myth, it has an influence of course, but what I said was that we've been paying high prices for a very long time. USA is not India though. Maybe our problem is that a lot of these companies are US ones and can charge us whatever they want. Wish we had some UK ones ... would be great to have someone over here working on GPUS and CPUs

 

[h4rm0ny]

no one said it's a myth, it has an influence of course, but what I said was that we've been paying high prices for a very long time. USA is not India though. Maybe our problem is that a lot of these companies are US ones and can charge us whatever they want. Wish we had some UK ones ... would be great to have someone over here working on GPUS and CPUs

Panos said "the exchange rate is a myth". It was a little hard to parse their precise meaning from their English, but they were definitely trying to dismiss exchange rates as a principal reason behind price increases. You're now trying to shift topic away from price rises by claiming the UK is charged more for its goods than other countries. We don't make much in this country (with the exception of the gallant folks at ARM who are actually licencing the IP anyway) so of course we pay more for goods. But none of what you're saying detracts from the key fact that you were originally responding to which is this:

Recent price rises we're seeing on GPUs is almost wholly attributable to the fall in the pound following the vote to leave the EU.

Any attempt to refute that, whether it's Panos declaring that margins are probably 15% and that therefore "simple maths" shows "exchange rates are a myth", or you attempting to shift topic and claim that "Britain paying more" is just a general state, can refute the truth of that statement.

 

[Jono8]

Recent price rises we're seeing on GPUs is almost wholly attributable to the fall in the pound following the vote to leave the EU.

This

 

[Widge]

I just bought a 1070 from the US, with import deposit and shipping, I'd say that it would have been about £430... which isn't that much cheaper than buying here.

If I didn't have non-transferable $ vouchers, I'd have bought in the UK.

 

[signal11th]

Only reason prices are that high for the card (regardless of brexit and currency fluctuations) are because you lot keep buying them. Fool and his money are soon parted. Saying that I do have a 4 grand watch on my wrist but I imagine that will last a wee bit longer than a gfx card.

 

[h4rm0ny]

Only reason prices are that high for the card (regardless of brexit and currency fluctuations) are because you lot keep buying them. Fool and his money are soon parted.

Well the supply-demand curve is true, but it's actually based around profit, not cost. I.e. if costs go up, then that hits profits which affects the supply side part of the equation and a new equilibrium is found which will be higher. Purchasers control one half of the equation, sellers the other and the price settled on comes out a balance of the two pressures. Rising costs (which mean falling profits if the sale price isn't adjusted) effectively mean more pressure on the seller side of the equation. Otherwise margins would fall to zero which obviously can't happen in a viable business.

If people in the UK stopped buying 1080's en masse, then you might see falls in price as retailers desperately tried to clear stock to avoid a complete write-off of inventory, but as demand world-wide is exceeding supply, it would just mean that Nvidia sold preferentially to other countries and the UK saw no 1080s because retailers couldn't buy them in at prices that were competitive with the other countries they are sold in.

 

[Cooper]

Only reason prices are that high for the card (regardless of brexit and currency fluctuations) are because you lot keep buying them. Fool and his money are soon parted.

Indeed, the PC tech market must be the only retail sector where it's customers are not only willing to drop their trousers & bend over, they also bring a good supply of lube with them as a courtesy to the manufacturers and retailers.

It's also why no one under the age of 30 should be given access to a credit card.

 

[signal11th]

Well the supply-demand curve is true, but it's actually based around profit, not cost. I.e. if costs go up, then that hits profits which affects the supply side part of the equation and a new equilibrium is found which will be higher. Purchasers control one half of the equation, sellers the other and the price settled on comes out a balance of the two pressures. Rising costs (which mean falling profits if the sale price isn't adjusted) effectively mean more pressure on the seller side of the equation. Otherwise margins would fall to zero which obviously can't happen in a viable business.

If people in the UK stopped buying 1080's en masse, then you might see falls in price as retailers desperately tried to clear stock to avoid a complete write-off of inventory, but as demand world-wide is exceeding supply, it would just mean that Nvidia sold preferentially to other countries and the UK saw no 1080s because retailers couldn't buy them in at prices that were competitive with the other countries they are sold in.

Very true, but as long as people are prepared to pay such foolish prices (everywhere not just UK) then NVIDIA have no reason to alter their strategy, Sorry but the days of me paying 500 quid plus for a gfx card are long gone especially when I can get a card that runs maybe 20% less for 200 quid less which in reality will not change my gaming life 0% and I can use the other 200 quid to do something worthwhile with. Until AMD actually take a year out and release a card that is better or as good as a NVID card but £100 quid less then nothing will change.

 

[Griffildur]

look, at the end of the day Brexit happened. People need to stop moaning and get on with it. Yes it had an effect, no the world is not coming to an end and it could actually be something very good for UK. Moaning and blaming others and calling them names does not change anything and it doesn't gain any friends either.

The world has much bigger problems than the prices of GPUs and the effects of the vote have the potential to change many things. Change is not always bad even if it takes a bit of hardship to get there. Let's see what happens next.

 

[Bantu]

Very true, but as long as people are prepared to pay such foolish prices (everywhere not just UK) then NVIDIA have no reason to alter their strategy, Sorry but the days of me paying 500 quid plus for a gfx card are long gone especially when I can get a card that runs maybe 20% less for 200 quid less which in reality will not change my gaming life 0% and I can use the other 200 quid to do something worthwhile with. Until AMD actually take a year out and release a card that is better or as good as a NVID card but £100 quid less then nothing will change.

it's always a problem when there are only 2 players in the market. Even if AMD released a card better than NVIDIA's i don't see why they'd go as low as £100 below. They have parcelled out the market between themselves. NVIDIA can have PCs and high-end, AMD will take consoles and low-mid end. It's done. Intel i suppose have entry-level with their on board graphics, but that's hardly worth mentioning.

 

[h4rm0ny]

look, at the end of the day Brexit happened. People need to stop moaning and get on with it. Yes it had an effect, no the world is not coming to an end and it could actually be something very good for UK. Moaning and blaming others and calling them names does not change anything and it doesn't gain any friends either.

I'm not actually moaning about prices at all. Nor am I criticizing people who are upset about the price rises. I'm only challenging people who claim that the recent price rises are not primarily the result of the vote to leave the EU or declare that exchange rates are a myth.

 

[M@rt]

OK, because this morning I am motivated to put some maths here and remove myths (eg exit from the EU)

KFA 1080 has £599. VAT 20% is £99. The net amount is £499.
Translating to USD with today's price, the new price in dollar is $658.68. At £1/$1.27 that is $633 per card.

If we hold NV truth to their word that the RRP is $599;
That means that the price of the card to the end market could be this. And is the price to the consumer NOT to the shops, which will buy the card cheaper. I have no idea how much profit margin the NVidia and AIBs allow, but at least a healthy 15% should be in order. (RRP - 15%). But definitely the shops do not buy on RRP.

Now lets put it into perspective. The cheapest USD prices of the GTX1080 in US is similar to the price in UK ($649)

So the weak sterling argument should be thrown out of the window guys. At £1/$1.27 we buy the cards cheaper than in US ($633 against $649 in US), while at £1/$1.32 we buy them not that much more expensive ($658 against $649 in US).

NV, AIBs and retailers simply want to make a good profit here, and everyone is trying to make money, because there is the supply-demand in place. You shouldn't be surprised if you see another £50 added to the card.

So even post GBP to USD conversion we buy more or less the same price as in US.


Weak pound myth.....

All this media "aaaaaa weak pound of 31 years, we are dooooooommmeeeeddddd"

Hold on a sec, look the exchange rate June 2014. I do not remember anyone here been up their arms about the prices of the graphic cards back then, when we paid 30% MORE than anyone else.......

Since you are so motivated, go back and consider VAT. It has been said enough by now that people should remember, US RRP excludes sales taxes, due to the US having wildly varying local and state sales taxes. So bitching and moaning about £1 to $1 prices only gets credence if you use ex Vat prices.

Gibbo has given you the calculation you need, as he did in the previous thread on the subject. Perhaps you should also bear in mind that pre orders priced on £1.44 ex rates were honoured despite OcUK paying now/next 30 days at £1.3?, that until the £ settles importers who do not hedge are basically gambling.

Should OcUK have used hedging to remove this uncertainty? I don't know, maybe, but it's not free and you would complain about that cost too.

 

[azazl187]

Well I would like to pass on my thanks to those in the south west and north who resoundingly voted in favour of HIGHER GRAPHIC CARD PRICES.

Good jobs lads, sock it to those EU bureaucrats. Oh, hang on...

I think its a little early for that kind of talk isnt it? Sore London loser more like

 

[eddyr]

Since you are so motivated, go back and consider VAT. It has been said enough by now that people should remember, US RRP excludes sales taxes, due to the US having wildly varying local and state sales taxes. So bitching and moaning about £1 to $1 prices only gets credence if you use ex Vat prices.

Gibbo has given you the calculation you need, as he did in the previous thread on the subject. Perhaps you should also bear in mind that pre orders priced on £1.44 ex rates were honoured despite OcUK paying now/next 30 days at £1.3?, that until the £ settles importers who do not hedge are basically gambling.

Should OcUK have used hedging to remove this uncertainty? I don't know, maybe, but it's not free and you would complain about that cost too.

He should also consider that Nvidia RRP does not enforce what AIB sell their various models to retailers for.

Or that a retailer paying in X days time might add in a few % margin depending what they expect the exchange rate to be in X days time. On high value goods this will be more £'s than with lower value goods.

I think its a little early for that kind of talk isnt it? Sore London loser more like

Well, despite the sarcasm, his are valid statements.

 

[Griffildur]

Well, despite the sarcasm, his are valid statements.

Are they? The result is not going to change based on those statements anyway so what is the point? Why even bother to use it on the OC forum?

 

[dits]

Any chance this thread will get closed down by midnight?

 

[shonik09]

Are they? The result is not going to change based on those statements anyway so what is the point? Why even bother to use it on the OC forum?

In his defence, all he is doing is telling the truth.. This isn't really about belief, it is fact the exchange rate drop is due to Brexit, and it doesn't take a genius to understand this will mean imports from the US or even EU will be more expensive, having a knock on effect to graphics cards... Just because you don't like it, doesn't make it any less true.

 

[eddyr]

Are they? The result is not going to change based on those statements anyway so what is the point? Why even bother to use it on the OC forum?

Yes, I don't think it really needs going over again. As a result of that action the price of many imported items like GPU's as well as any other imported goods (but especially notable with high value goods like high end GPU's such as the GTX1080 amongst other goods) will naturally be more costly to buy in the future because a.) in the immediate term they go up in price due to the dropping value of GBP vs whatever currency in which they are purchased; and b.) in the midterm with ongoing economic disruption that will result is reduced consumer spending and help sustain a lower than otherwise value of the £. (The extent of which is admittedly not yet known and for which everyone should be crossing their fingers that it is as minimal as possible).


True, it's done, its not going to change and we just have to deal with the consequences good and bad, but I do think it is legitimate irritation to what is effectively the continued open acknowledgment by individuals that they didn't really consider the widespread implications thoroughly, as evidenced by those claiming no ill effect attributable to the EventThatShallNotBENamed and subsequent effects on the value of the GBP (and cost of purchasing GPU's in Dollars against which the value of the GBP has dropped) and on future economy activity. The feedback into the rest of the nation and our various sectors of economic activity is no less real just because they have no direct interaction. Anyway the misplaced blame will bite us in the backside as we fail to hold to account those truly responsible so we really have gone to extraordinary lengths to show all the wrong people 'what for'. To keep us on topic: I hope the pricing of GPU's doesn't continue to suffer as a result of bad public reasoning.