HP, Dell warn of possible price hike

PanARMENIAN.Net - Tech giants HP and Dell have revealed that they are keeping a close eye on developments in the Chinese labor market and may even be forced to put up their prices if wages keep increasing in the region, the Register reported.

It was reported last week that Taiwanese hardware giant Foxconn – which is the world’s largest component maker and builds products for companies including Apple, Dell, Nokia and HP – had raised its wages from 16 to 25 per cent after a consumer backlash over working conditions at its Chinese plants.

Salaries now start at 1,800 yuan (£181) per month, double the 900 yuan workers got three years ago and reportedly represent the third wage increase there since 2010.

However, according to Reuters, margins are so tight at the tech titans that wage increases could eventually have a knock-on effect at the till.

"If Foxconn's labor cost goes up, their product cost to us will go up," HP boss Meg Whitman told the news wire. "But that will be an industry-wide phenomenon and then we have to decide how much do we pass on to our customers versus how much cost do we absorb."

Dell said it was also monitoring the situation.

“It's not clear to us how that will play out in terms of our costs," the firms CFO Brian Gladden told Reuters. "It remains to be seen how that flows through the overall supply chain. We will continue to watch that."