Computer prices flatten as buyers go for the frills

Article Abstract:

Consumer desktop computers have flattened despite an industry drive to introduce less expensive models. Prices reached a plateau of $1,130 through Sep 1998, according to ZD Market Intelligence. Most customers are electing to pay extra for more current features, because the technology in low-end PCs frequently is around 12 months old. By contrast, the late 1997 consumer PC market emphasized sub-$1,000 offerings from major vendors. Retailers say the customer market for sub-$1,000 PCs leveled off at around 45% after the initial surge. Computer manufacturers also have adopted more effective tactics at promoting more expensive and more profitable offerings. Popular methods include special deals that package PCs with accessories, or new store kiosks that offer custom ordering. Other factors are stable prices in the significantly larger and more lucrative corporate PC market, a slower reduction in component prices, and apparent customer willingness to spend more in the second half.

United States, Analog & Hybrid Computers, Consumer prices, Industry trend, Computer Industry

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Bargain PCs thrill buyers, worry makers

Article Abstract:

Sales of new sub-$1000 PCs with up-to-date technology and consumer-friendly features are excellent, which is good news for software and peripherals makers, but a mixed blessing for the PC makers. Packard Bell NEC's new $799 C115 is now its best-selling model, AST Research has a $999 model, and Compaq is offering the Presario 2100 for $999. Analysts estimate that profits margins are very low on the new low-cost PCs, and PC makers risk cannibalization of sales of their high-end lines. For most consumers, sub-$1000 PCs can handle virtually all the required tasks, especially Web surfing, since its speed is determined primarily by the infrastructure of the Internet. Impending competition with the network computer is also putting pressure on PC makers. Semiconductor giant Intel is also concerned about the new market, and is aggressively marketing its new high-end MMX chip. One in four PC buyers are now buying systems for under $1,000, up from one in seven in 1995.

Analog Computers, X86 processors

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Now PC buyers are getting more for even less

Article Abstract:

The average price for home computers continues to plummet at a 40% annual rate, led by the declining prices of hard disks, CD-ROM drives, DRAM and CPU chips, providing consumers with increasingly powerful PCs at unprecedentedly low prices. However, the resulting decline in profit margins threatens the viability of weakened PC vendors such as AST Research, Apple and Packard Bell. The average price for for a PC with a 100MHz Pentium and 16MB of RAM has fallen between 38% and 47% since mid-1995, and many models include advanced modems and CD-ROM drives. In order to sustain traditional revenue rates, PC makers increasingly market their high-performance models as entry-level units. The lower prices have resulted in an increase in overall PC sales of 15% for 1st qtr 1996.

Microcomputers

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