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Dynamic pricing hits PC market

IBM, Compaq, Dell, HP all trying it

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PC vendors are planning to introduce dynamic pricing to shift inventory online.

IBM, Compaq, Dell and Hewlett-Packard are among those "actively investigating" dynamic pricing models, according to a report by InfoWorld.

IBM has already started dabbling - after running a pilot program in Europe it expects to begin a similar program in the US as soon as next month, a source, who asked to remain anonymous, told the magazine.

Big Blue has been using software from California company @themoment, which allows it to automatically switch server prices in real time according to customer demand and product life cycle. The US scheme will involve servers from its Unix-based pSeries and Windows-based xSeries.

Compaq has also been using the idea - with shoppers at its Factory Outlet site acting as guinea pigs. Compaq said that if all went well with the experiment the pricing model would be extended from the Factory Outlook site, which offers excess and refurbished products, to its main site by the end of the year.

And Dell and HP are not far behind. A Dell representative told InfoWorld: "If the price of memory or processors decreases, we pass those savings along to the customer almost in real time." Whereas HP prefers to call its dynamic pricing "contextual pricing", the idea is still the same.

Prices change as customers order multiple items on certain offers. The company is considering extending the method to its whole product line by the end of the year.

All this means that system prices could change constantly, and catching a bargain would be down to surfers' lucky timing.

Last year Amazon.com annoyed surfers when it was discovered to be using a dynamic pricing system it had failed to publicise - the e-tailer used the system to make regular customers pay more than first-time users of the site. ®

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InfoWorld article

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