Notebook slump hits America

Vendor panic

By Linda Harrison in New York • Get more from this author

Posted in Business, 20th December 2000 21:39 GMT

Free whitepaper – Power distribution systems for the Dell PowerEdge M1000e Modular Server Enclosure

Notebook PC makers could be in for an even worse time than their desktop PC counterparts.

Dealer and distributor sources tell CNET that November was the first month in about a year and a half that inventory levels were higher than unit sales - and the situation has worsened through December as notebook makers continue to cut prices.

Sales are slowing for notebooks, despite a frenzy of vendor price cuts, rebates, freebies and special offers. But with a price war hurtling toward them, notebook vendors are in an even worse position than desktop PC makers.

Generally, notebooks are more expensive than desktops, and this means they can't be shifted so quickly. In turn this means greater vulnerability to excess inventory. The upshot could be a price bloodbath, come January.

News reports in the US show how quiet stores in general are, but are now homing in on the desperate attempts of notebook makers to entice customers.

Compaq has just chopped $100 off the price of its Presario 17XL360 - it now goes for $1,999, while customers get another $100 rebate from the vendor. And Dell today announced price cuts of up to 20 per cent on (albeit) corporate notebook lines.

CompUSA is giving away a $100 gift certificate on AMD-based notebooks, and last week Sony started to hand out a free wireless modem worth $480 with its Vaio notebooks.

"The overall IT economy has slowed down dramatically," Mark Romanowski, VP of services for Long Island City, New York-based dealer Jade Systems told CNET.

He reckons customers will be able to pick up a stack of bargains in the next week.

"Every manufacturer is trying to push as much as possible out the door by the end of the year," he said. "You put all those things together, and you can get some good deals." ®