Price declines will continue as computers and related input costs decline for suppliers
Los Angeles, CA (PRWEB) May 20, 2014
Computer hardware rental services have a buyer power score of 4.6 out of 5, indicating high negotiating power for buyers. This score reflects a steady decline in rental fees, the availability of a wide variety of suppliers, and the declining cost of computers and relevant input costs. Input costs for suppliers have declined at a steady rate over the past three years. “Buyers also benefit because they are purchasing from a source with a low risk of default or bankruptcy,” says IBISWorld business research analyst Andrew Krabeepetcharat. Alternatively, factors that decrease buyer power include moderate switching costs and growing demand for the service, which has offset a strong decline in prices.
The large number of suppliers in the market gives buyers significant negotiating power, because it allows them to compare different suppliers. Manufacturers are able to offer substantial quantity discounts, although smaller buyers may not have access to rent directly from the manufacturer due to minimum rental requirements. Retailers are able to offer more one-on-one customer service, a shorter buying lead time and no minimum renting requirements, typically in exchange for slightly higher prices. With a high number of vendors to choose from, buyers are better able to negotiate with suppliers on price. “Also, buyers with a range of computer rental requirements will be able to find a vendor that can provide them with appropriate rental services,” says Krabeepetcharat.
Buyer negotiating power is limited by a moderate level of switching costs, though, as rental contracts generally lock in agreements between one and five years. Also, rental contracts are difficult and costly to terminate after signing. Installation and setup fees also make it difficult for buyers to switch to another vendor after a rental contract has been agreed on. Consequently, although buyer power score is high and there is a substantial degree of negotiating power, buyers should take time to carefully evaluate their needs and resources before entering into a contract. Major vendors include Apple Inc., CDW, Dell and Hewlett-Packard Development Company LP. For more information, visit IBISWorld’s Computer Hardware Rental procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of computer hardware rental. Computer hardware rental companies allow businesses to rent computers and relevant peripherals, and requires a fee based on the value of the computer hardware rented. Suppliers include manufacturers, retailers and third party suppliers. This report does not cover the rental of servers.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.