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Strategies & Market Trends : Technical analysis for shorts & longs

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Dec 18 4:00 PM EST

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To: Johnny Canuck who wrote (16516)	6/12/1998 4:08:00 PM
From: broken_cookie	Read Replies (3) of 69121

How Low Can PCs Go? Not Much Lower from Herb Greenberg at the street.com Is that the sound of crunching PC margins in the background? Quite possibly. It's all hush-hush, but I hear from normally reliable sources that four Taiwanese PC makers are planning to announce as early as next week at PC Expo in New York a new line of desktop PCs priced at $299, $399 and $499. Currently, the cheapest models cost around $700. If all goes well, the ultracheap PCs should be rolled out at retail in time for back-to-school. Each machine supposedly will use a 233-megahertz Cyrix chip, with the cheapest model sporting a black-and-white monitor. Execs of Acer have been talking for months of their desire to roll out a $300 PC. But such low prices hadn't been expected for at least another year. "Nobody is quite ready for those kinds of price points," says hardware analyst Stephen Baker at PC Data, which has been predicting that two-thirds of all PCs sold in the fourth quarter will be priced below $1,000 -- double the number sold in that price range a year earlier. Today, however, the typical storefront PC shop can build and sell a decent machine for as little as $500 -- not benefiting from the lower prices associated with mass production. Which companies will be behind the cuts? The only clue: A story in Wednesday's AsiaBizTech news service reported that Acer, Leo Computer Systems, Synnex Technology and Mitac International were slashing the prices of computers equipped with Intel's (INTC:Nasdaq) Pentium II to around $800. Some analysts say that such rapidly falling prices may spark demand -- at least initially -- but not enough to offset the cuts. Not good news for an industry still trying to unclog a stuffed pipeline of higher-priced merchandise.

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