Owl, This Dell news is somewhat surprising to my Mom & Pop eyes. Do you think I would be incorrect to assume that Dell is basing these comments on what it is hearing from customers, rather than suppliers?
No, I think you're correct. Historically new products from Wintel have fueled strong upgrade/replacement demand in the market. Windows, Win95, Win98, Pentium, PII, PIII, etc. Each represented a new level of performance enhancement or feature sets the users found desirable. (And of course the Internet created a whole new market of users).
The market may be saying the new products no longer offer a compelling reason to upgrade. A bad omen in a saturated market.
My knee jerk reaction is to assume that customers indicating a "pass" on current product offerings in favor of buying when new operating system and CPU/Memory options are available. I don't see how "price conscious" purchases would be delayed into the 4th Qtr. Can prices be any lower in December?
I think the industry finds itself in a situation where it now relies more on price as the motivating factor than performance. For example, I think the recent price drops for P4 are about double what was projected back at the end of February. (As I recall, the P4 1.7GHz was to be launched at $776.00). It would seem that performance doesn't have the same influence as in the past.
As for Q4, this is probably the strongest quarter historically for PC's. Q4'00 was somewhat disappointing for the industry. Some discretionary spending was diverted from the purchase of new PC's to enhancements for existing PC's, ie: digital cameras, printers, scanners, etc. (Another indication the installed base doesn't see a need to upgrade the PC).
I anticipate a major shift of CPU and memory in the segments in Q4. My guess is that the lower speed P4's with SDRAM introduced in Q4 will be positioned in the low end "Mainstream" at very attractive pricing. (A $1K system with all the bells and whistles you pay extra for right now). The high end may come in with 2GHz P4/RDRAM.
The positioning of PIII is confusing to me, in that if PIII/SDRAM is in the "Value" segment it would seem to be competing with P4/SDRAM. But Intel may be delivering on it's promise to replace the PIII as rapidly as possible. Could we see a P4 priced below PIII in Q4?
IMO, marketing has some surprises up it's sleeve.
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But that's what makes it interesting for us Mom and Pops. <G>.
JMO's |
