I have no doubt they will argue the price increase as a result of tariffs, but market prices are and will always be about what the market will tolerate and rarely nothing else. This is why many other companies will segment the market with what often is the same product under different prices.
Acer is not selling laptop based on the cost of raw resources and then adding a fixed markup. Most costs are in development. A large shared of a high end laptop is share components among all of their products. Depending on specific, their most expensive laptop can be a loss or profit per when accounting for development, research and marketing. Flagship products are generally not about selling individual units.
Looking at Acer profit as a company, one can not add import tax to the end number.
For the vast majority of laptops that aren't made by Apple all profit margins are entirely erased (and then some) by these tariffs. So yeah the manufacturers could eat the cost... as long as they don't mind losing money on every sale.
Out of those, components and assembly is the unit cost. If the cost of components and assembly are greater than sell price then every sale is a loss. Tariffs impact this cost, and they are not close to erase the difference between sticker price and unit price. The estimated per-unit profit margins for a company like Lenovo, Acer, Dell and so on is in the range of 25-30% per laptop, through the exact numbers do not get published. In comparison, Apple is estimated to be around 60% per laptop.
It is when you then add Software & Licensing, Research & Development, Marketing & Branding, and static costs, spread out on all sold units, the profit margin goes down to 5-10% (with Apple here having a margin around 40%). Some of that margin get significant increased with added services like extended warranty and payment plans.
Tariffs will decrease profits. In order to get the same profit as before tariffs they can increase prices, but it risk decreasing sales. If sales drop then the static costs is spread out over fewer sold units, which mean they would need to increase prices even more to cover the lost sales. If they increase it too much, sales drop below viability and they go bankrupt. Alternative they could decrease price (compared to the competition) in order to increase sales, covering the increased unit cost by increasing sales volume. The best strategy is to have a price that results in the highest combination of price and sales volumes.
If they currently have a 5% margin and their costs go up, they either
1) Go bust
2) Increase prices
This isn't a situation where supply is constrained (say in housing), where you will charge the same no matter the costs. If you charge too much then a competitor will increase supply and undercut you and you lose business.
Tarrifs means that your competitor can't undercut you, until it becomes cheaper to build entirely in the US, which will me far higher tarrifs and far higher prices that the end consumer pays.
Are you saying, if the supplier's cost goes up by 10-25% due , they should absorb it, and sell the product at the old price? Is that what you would do if you were building a product to sell?
> I have no doubt they will argue the price increase as a result of tariffs, but market prices are and will always be about what the market will tolerate and rarely nothing else.
Only in a market where sellers (either a single seller or a cartel) exercise monopoly power; in a competitive market, market clearing costs are driven down toward zero economic profit by competitive pressure.
Acer is not selling laptop based on the cost of raw resources and then adding a fixed markup. Most costs are in development. A large shared of a high end laptop is share components among all of their products. Depending on specific, their most expensive laptop can be a loss or profit per when accounting for development, research and marketing. Flagship products are generally not about selling individual units.
Looking at Acer profit as a company, one can not add import tax to the end number.