Looking for bargain-priced HP PCs

Exiting the PC business could easily take HP 12-18 months, if it ever happens. Photograph: Marcus Brandt/EPA

Now that HP has decided to exit the PC business, to which retailers should we look to pick up bargain-priced HP stock? What usually happens to inventory when tech companies exit a market?
Edward

Hewlett-Packard has not exited the PC business, yet, just the mobile phone and media tablet hardware businesses. In the UK, it knocked out TouchPad stocks via Currys, PC World and Dixons.co.uk. The 16GB version went for £89 (down from £349.99) and the 32GB model for £115 (down from £429.99). Those prices reflected the fact that there isn't very much software for the TouchPad's WebOS operating system, and it's not clear whether more apps will be launched. Also, if a TouchPad breaks or its battery fails out of warranty, could it be repaired?

Exiting the PC business could easily take HP 12-18 months, if it ever happens. HP's Personal Systems Group has an annual turnover of $40.7bn (£24.8bn) and must have manufacturing contracts for the production of tens of millions of HP and Compaq computers. HP is now considering whether to spin PSG off as a separate company, or try to sell all or part of the business to someone else. Either way, PSG is expected to continue trading as normal. Buyers might put a lower value on HP's products, but there is not much chance of a TouchPad-style clearout.

Even if PSG has to dispose of a few million PCs at reduced prices, this might not have a big impact. Most of HP's PCs have well-known Intel or AMD processors and standard screens and hard drives. They also run Microsoft Windows 7 and will run Windows 8, which is intended to require fewer resources. (Windows 8 will also appear on less powerful ARM processors so it will need to be efficient.)

HP's "overstocks" will not be orphans. They will run millions of Windows programs, they will work with all popular websites, and they will be repairable by independent service companies. Buyers will still expect these laptops to last for three or four years, or longer, so they probably won't be offered at fire-sale prices.

Also, HP is a tier-one brand. It can drop its prices slightly and shift the problem to suppliers of second-tier and no-name laptops that sell mainly on price.

Acer, the giant Taiwanese PC supplier, has a problem with unsold stock, having discovered "abnormalities in terms of channel inventory stored in freight forwarders' warehouses, and in the accounts receivables from channels in Spain," and is taking a $150m write-off. Some other companies may also have unsold stock because, according to Gartner research, UK sales of PCs fell by 15% in this year's second quarter to 2,462,000 units. It's a good time to look for bargains but you may not see significant reductions until just after Christmas, when Intel releases new chips.

Sometimes suppliers want to shift a load of PCs quickly, either because they're discontinuing a particular model or because they are bringing out a new range. However, they usually don't want to sell them via their usual outlets (Currys, PC World etc) because that would upset everybody's idea of orderly pricing. These are good candidates for discount websites, or they can be sold as "supermarket specials".

Over the years, I've seen great deals in a variety of places including Aldi, Morrisons, Argos and Staples. These are not places I'd normally look for a new PC.

Of course, buying a laptop that really is a special offer means you won't get much choice of specification or brand.

There are plenty of websites where you can hunt for laptop bargains including Amazon.co.uk, Laptopsdirect, Save On Laptops, Laptopshop.co.uk, ebuyer.com, Misco, and Tesco Direct. Compare prices to make sure the savings are real and, as usual, caveat emptor.

Many online stores sell "open box" products, which means the original customer returned it, possibly because he "changed his mind". There are also "Grade B" products, which means there can be cosmetic damage on a new PC, such as minor scratches. Finally, some sites sell refurbished laptops, which may have been heavily used. The Laptop Centre, Student Computers and Portable Universe have lots of refurbished laptops, as do many other sites.

Dell Outlet sells returned and refurbished Dell PCs, while Apple UK sells Apple Certified Refurbished machines.

When new laptops cost £1,500 to £2,000, there was plenty of incentive for bargain hunting or buying refurbished PCs. Now that you can get a netbook for £200-£250 or a decent laptop for £350-£500, the potential savings are much smaller. If you save £100, that's only £25 per year for four years, or 50p a week. If it means buying a laptop you'll hate rather than one you'd like, it might not be such a good deal.

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