Question: If smartphones are getting bigger would that mean that less laptops would be sold and they would get cheaper?

Catherine Conaghan answered on 18 Nov 2014:

Long answer coming up, but …laptops definitely still have their place and will do for the next while. Smartphones/tablets remove the need for using laptops for smaller tasks e.g. checking Facebook, booking flights, browsing the internet, e-mails etc. Laptops have a lot more power behind them and allow a lot of different software packages to be run on them and will still be used in workplaces/colleges/research etc. for a time to come . The crossover at the moment is the Tablet. For example the Microsoft Surface pro – which can be used as a laptop or a Tablet, but even that isn’t sufficiently fast for running any sort of heavy software – they are only used in our company by the Sales people who don’t need a lot of computing power. But, your right, laptop sales have definitely decreased because of smartphones and tablets.

When you are talking about prices dropping, you’re getting into business and the engineering 🙂 On the engineering side laptop prices have been decreasing for years because of something referred to as Moore’s law, which basically means that every 18 months computer chips (the main part of a laptop/PC) become twice as fast. So that means every 18 months it is cheaper to make a more powerful laptop.

On the business side, if laptops sales drop (which they have done in the last few years) it might mean that the price actually goes up. Imagine if you build walls. You need some fixed costs e.g. a cement mixer and other tools (say they cost €200 a day to rent). Then the cement and bricks for each wall costs €10. If you build 10 walls in a day that will cost you €200 + €100 = €300. €30 per wall – so you can sell your wall for €40 and make a profit. But if there is less demand and you can only sell 5 walls in one day, you will only build 5 walls. So the cost for 5 walls would be €200 + €50 = €250. That’s €50 per wall. If you sold a wall for €40 then you would lose money. So you would actually sell it for €60 or something like that to make money. Sometimes if you sell less of something the cost to make it goes up, meaning your price have to go up.

In short, laptops have and will decrease in price or get more powerful for the same price, but because there is less demand it probably won’t decrease as much as expected!