Feeds

PC prices plummet in Europe

No Mercy

  • alert
  • submit to reddit
ComputerWire: IT Industry Intelligence

Early migration to Pentium 4-based desktop PCs and PC servers helped the European PC industry reverse a year of falling prices in the first quarter, but according to the latest price index findings of IDC, this respite has proved brief, and prices are spiraling down once more.

According to the Framingham, Massachusetts-based market researcher, the overall PC price index for May sank 1.2 points, and slipped a further 2.2 points in June, as fierce competition eroded the fleeting premiums enjoyed from early Pentium 4 sales. Year-on-year, the overall June index was 10.3 points lower.

The indications are that pricing pressure will continue to increase and drive the index down further. In June, for instance, the desktop index slipped 3.6 points sequentially, while the notebook index declined 2.4 points from May.

This declining trend is set to continue in the notebook sector says IDC, noting that the market is evolving into price-differentiated bands, with lower price bands showing the healthiest growth. Whereas before the start of 2001 75% of European notebook sales enjoyed a price point higher than 2,000 euros ($1,976), today almost 70% of notebook sales come under this price point, with 50% of them averaging less than 1,750 euros ($1,729).

The crimp on prices is great news for buyers, but it spells hard times for suppliers in a market that is increasingly ripe for consolidation. Margins, IDC notes, are bound to narrow as the scramble for market share pushes systems prices down faster than component prices.

In these conditions, smaller suppliers can expect no mercy from the likes of Dell, which continues to push down hard on prices, especially in the UK and Germany, and Hewlett-Packard Co, which launched its own price assault earlier this year, even before acquiring arch desktop and server rival, Compaq Computer Corp. The HP/Compaq mega merger represents "an important challenge for all players" said IDC.

© ComputerWire

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.