Expect lower tech prices, but not immediately

South Africans can expect lower prices on computing and technology products, but it will take time to filter through.

This is according to Esquire CEO Mahomed Cassim, who said the rand’s strength will result in lower technology prices.

However, as many importing companies took forward-cover from financial institutions at a higher rate than the current exchange rate, prices are expected to remain static in the short term.

Forward-cover is a financial instrument which fixes the exchange rate when buying or selling products in another currency.

This makes it possible for companies to hold prices steady when dealing with volatile currencies, like the South African rand.

Cassim said whatever pricing relief they have received, which is based on the lower rate of exchange, has already been passed on to their clients.

“We are confident that if the rate of exchange remains steady to what it is now, it will allow even more pricing to fall,” he said.

Should the rand continue to strengthen, Cassim expects to see retail prices falling as new stock arrives in the country.

Matrix Warehouse said it also expects prices to go down, but it would take around three months to filter through. This also relies on the rate of exchange staying favorable.

The company said the exchange rate is only one factor which determines the price of products, though.

“If there is a shortage on a product, the unit cost goes up as the value of that specific product increases,” it said.

New products

Duxbury Networking director Paul Stuttard concurred, stating that local technology prices will decrease as the rand strengthens.

“The lower the rand, the lower the price for like-for-like imported products,” said Stuttard.

Stuttard added that the introduction of new product lines also brings a change in the technology that is available.

“The newer products often offer greater functionality, but at similar prices to the products they are replacing,” he said.

Now read: Stronger rand means better smartphone deals in South Africa

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Expect lower tech prices, but not immediately