I am in the PC assembly business, and if we sell a PC for $1000 not including a monitor (P166 MMX, 32M RAM, 24X CD, 33.6 Modem, 3.5G H.D) we make about 35% which is a lot higher than last year, when the parts were expensive. What CPQ did is they lowered their warranty from 3 years to 1 year, which brings in a lot in repairs, also they charge $30 on tech support per incident when the warranty expires.
Also I belive that CPQ will stop selling through stores and sell direct, which will cut the comissions the stores make. Also with the Internet, there is a huge demand for PCS.
Also, there is a whole market out there that wants high end PCS, PII266 and PII 300 , which cost $2500 - $3500, a lot of people buy 17" monitors and 20-21" monitors, unlike last year. A price cut will only hurt Intel, but they are covered also, since they always make sure that they have something to sell for $350 - $450, actually, with the PII 300 they will make more money since it is highr in price than the average top of the line CPU from last year. I expect DVD ROM and DVD RAM to be standard in 1998, which will increase the cost of a PC by $150
There is a lot of money to make in PCS for ALL companies, including CPQ. |
