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Due to expectations for falling printer and monitor display prices, we estimate that the Printers and Display business of Dell (NASDAQ:DELL) accounts for only around 3% of the $17 Trefis price for Dell’s stock (44% above the current market price of $12). Dell faces a barrage of competition from players like HP (NYSE:HPQ), Lexmark (NYSE:LXK) and Samsung that will make it hard for Dell to gain significant share in printers or displays to offset the impact of falling hardware prices.

Dell Printer Pricing

In the past, Dell Printer Pricing has increased from $230 in 2004 to $280 in 2009. We expect Dell to continue slashing prices aggressively in order to keep its demand afloat and compete with market leaders like HP and Lexmark.

The average of Trefis member forecasts for Dell Printer Pricing indicate a decrease from $264 in 2010 to $193 by 2016, roughly in-line with the baseline Trefis estimate of a decrease from $266 in 2010 to $196 by the end of the Trefis forecast period. The member estimates imply a small downside to the Trefis price estimate for Dell’s stock.

Dell Display Monitor Pricing

Historically, Dell’s display monitor prices were rising because of the switch of technology from CRT to LCD monitors. Dell Display Pricing has increased from $220 in 2004 to $266 in 2009. However, due to competition from Samsung, the market leader in displays, and diminishing demand for desktop monitors, we expect Dell’s display monitor pricing to decline by the end of Trefis forecast period.

The average of Trefis member forecasts for Dell Display Pricing indicate a decrease from $251 in 2010 to $183 by 2016, compared to the baseline Trefis estimate of a decrease from $253 in 2010 to $186 by the end of the Trefis forecast period.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Dell’s stock to Dell Display Pricing.

Source: Printer and Display Trends Don't Bode Well for Dell