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11/25/2008
04:34 PM
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Fewer Than Half Of Available PCs Reused

Transportation costs, import tariffs, and environmental legislation are among the hindrances cited by refurbished PC exporters.

Worldwide demand for used PCs is greater than supply, yet less than half of PCs entering the secondary market get reused, a researcher said Tuesday.

About one in five PCs targeted for reuse find their way from a mature to a developing economy, Gartner said in a report. Of those machines that actually make it, only 44% get used. Major hindrances include export tariffs and high transportation costs.

"The secondary PC market offers great opportunity to specialized intermediaries, resellers, or vendors, but it is a highly fragmented and competitive market," Gartner analyst Meike Escherich said in a statement. Refurbished PCs typically offer equal or better profit margins than new PCs, ranging from $10 to $50 for a 3-year-old machine.

However, transportation costs, import tariffs, and environmental legislation make it difficult for low-volume players to compete. In addition, product quality, falling average selling prices of new PCs, and the increasing buyer preference for notebooks and the most-recent specifications are threatening the secondary market.

The emergence of ultra-low-cost mini-notebooks, often called netbooks, are also a potential challenge to the refurbished market. "Nevertheless, we expect that most buyers of used PCs will prefer a higher-specification A-branded PC over a basic mini-notebook," Escherich said. "Also in times of uncertainty and recession, we expect replacements will slow down with demand increasing and supplying decreasing."

The largest exporters of secondary PCs by region are North America, Western Europe, Japan, and Australia. The greatest demand is from the Middle East, Africa, and Asia/Pacific, particularly China. Most suppliers of refurbished PCs to sellers are large and midsize businesses and government agencies.

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