Mark, USA Today reports the following in this mornings news:
IBM cuts prices, reduces product line
NEW YORK - Following similar moves by rival PC makers, IBM
Monday cut the number of personal computer models it sells a shaved prices, starting at $1,000 instead of about $2,000. At the same time, IBM is streamlining distribution to cut costs. It will limit sales of Aptiva machines to the nation's six largest computer retailers, which traditionally sell 80% of its consumer machines, and sell Aptivas in only 22 countries instead of 102.
Computer makers are trying to stay profitable while keeping pace with
a sharp drop in PC prices this year. Major makers such as Compaq Computer and Packard-Bell-NEC now sell fully equipped machines for less than $1,000.
International Business Machines is working with the retailers to reduce their stocks of computers, trying to avoid the practice of compensating stores for models that don't sell quickly.
"The biggest Achilles heel in this business is inventory," said Brian
Dalgetty, program director of product marketing for IBM's consumer division.
At the same time, the Armonk, N.Y.-based company said it is moving
away from the industry practice of cutting computer prices several times over the life of a model. Instead, IBM officials said they will offer more features, such as extra software, for the same price.
IBM's cheapest PCs, the Aptiva E series, start at $1,000 for a machine
running on a 166-megahertz microprocessor, without a monitor.
IBM is using its brand name on the chips, even though they are made by Advanced Micro Devices. IBM joins other computer makers such as Compaq that use cheaper AMD microprocessors in some less sophisticated machines instead of chips made by Intel, whose microprocessors are the brains in 85% of all PCs.
While IBM is cutting the number of Aptiva models to six from about 10 in February, its lineup has actually broadened due to the less expensive PCs.
Its Aptiva new L and S models, which are priced up to $3,300, come
equipped with a mouse that includes a central button that consumers
can use instead of "scroll bars" to more easily surf the Internet and
navigate through documents. Users simply touch their finger to the
button to move around documents.
The stores selling IBM Aptivas are CompUSA, Best Buy, Radio
Shack, Circuit City, OfficeMax and Computer City.
By The Associated Press
It looks like competition between Cisco and 3Com is also heating up. These factors could be making tech stock holders nervous.
Larry M.
Ps: my 1st post - hope it helps |
