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Trigem III – now look out for the $399 PC

Wal Mart deal may have been smoke, but we've still got millions of boxes to shift...

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The confusion surrounding Trigem's $499 iMac-esque PC has started to clear, with the emergence of what seems now to be a fairly normal scheme to storm the US retail market, with three classes of machine at $399 and $499 price points. Earlier this week Trigem was reported to have struck a massive deal with Wal-Mart (see Huge Wal-Mart PC deal to bust $500 mark), but yesterday the company found itself denying that any such deal existed (see TriGem deal with Wal-Mart merely a dream). In all probability what really happened was that the operation that will actually be selling the machines in the States, eMachines (a joint venture between Trigem and Korean Data Systems), has been talking to Wal-Mart among other companies, and that good old Korean optimism contrived to translate this into a done deal in the pages of the Korea Herald. Even as you read the optimist responsible may be dangling by his thumbs in a back-room somewhere in Seoul. It's now being reported that eMachines is somewhat more modestly in talks with the major retailers, including OfficeMax, Best Buy and Fry's Electronics. Some of these are going to have to bite, as the numbers quoted in the original leak are vast enough for it to be imperative for this huge pile of gear to go somewhere, whatever the price. The first machine, the eTower, will be a $399 Cyrix-based box with two gig hard drive, 3D graphics and built-in modem. Planned Q4 shipments of 200,000 units are in line with the 130,000 Trigem didn't really say it was shipping through Wal Mart. Next out will be a Celeron version with a bigger hard drive, and a Cyrix one with DVD drive that will connect to a TV -- both of these will be $499. But think of the financials involved in this little lot. If Trigem was talking about shipping 1.13 million units through Wal Mart in the next year, and if the 200,000 for Q4 is projected over that period, we'd reckon on 1.5 million units plus going into the US in a year. That comes to a retail value in excess of $600 million, which is 75 per cent of Trigem's 1997 sales. Add some more for similar sales programmes in the rest of the world and you get a picture of a company making a huge bet on a massive production ramp, and scarily narrow margins (if you could even call them margins). Those optimistic Koreans, eh? ® Click for more stories

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