From Korea:
Domestic PC makers considering price reduction
Domestic personal computer makers plan to slash prices sharply next month, as Intel is expected to reduce the price of its CPUs by up to 43 percent.
The industry expects the planned price cut to stimulate consumer demand, which has been slow since the latter half of last year and shows no signs of recovery in the holiday season.
The world's largest chipmaker is scheduled to announce a price reduction for its Pentium and low-cost Celeron CPUs later this month.
The move is aimed at spurring its chip sales, which the company projected to fall 15 percent in the first quarter. Intel Korea said the new pricing policy follows Intel's recent expansion of production capacity.
Industry sources said domestic PC makers have already concluded an agreement with Intel to trim the price of Intel CPUs in provision contracts.
Experts expected a cut of up to 43 percent for Pentium III processors running at 1 GHz. Currently priced around $465, the chip could go down to about $270, which is not much higher than 866 MHz Pentium III chips.
In general, CPU, the main computing engine, accounts for 20-30 percent of the total component costs for PCs.
Domestic PC makers are readjusting prices in time for the February graduation season, when demand is usually high.
PC vendors sell 1GHz PCs at different prices depending on quality of other components. Retail prices, not including monitors, range from 4.24 million won for Samsung Electronics to 1.69 million won for Hyundai Multicav.
Industry sources expect the average price to fall from 2.9 million won to around 2 million won next month.
LG IBM, which sells the high-performance PC for 2.39 million won, is considering lowering the price to around 2 million won. A final decision has yet been fixed, but the cut rate will range from 10-15 percent, a company official said.
Hyundai also plans to shrink the price by 10 percent to around 1.5 million won.
The affordability will help the high-end PC model to widen its share in the market, said a marketing official of TriGem Computers.
The company sells 1,000 units per month now, but he said the sales volume will jump in the second quarter, speeding up a wider use of GHz-class PCs.
Prices of PCs running on lower-level CPUs, like the Pentium III 800 MHz and 933 MHz, is also likely to go down, as companies are racing to reduce unsold inventory before the beginning of the latter half of the year, when demand for MHz-level PCs is expected to dry up with 1 GHz models becoming market mainstay. (HJJ)
2001.01.29
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