Hi Techie; Will PC prices plummet further?
And by some time next year, $399
price points may become a reality.
cnn.com
My guess is that most of the rest of the world will start
buying personal computers when we get the prices down
to the sub $300 range, but not until then.
For reference, here is the recent posting by a PC
market expert regarding how low personal computers
can go, (quoted by Meathead):
PC makers are madly trying to build sub-$500 PCs for
these customers. I think this is folly.
First of all, trying to squeeze another $200 out of
today's bare-bones $699 PC is tough. The total
semiconductor content of these systems costs about
$100, so even if Moore's Law drives this down to
zero, we're still a hundred dollars short. The rest
of the system is motors and metal that aren't likely
to get much cheaper in the near future.
exchange2000.com
If these people cannot even tell you what next year's
computers will cost, there really isn't a reason for
anyone to believe their estimates of what the industry
will look like 20 years from now.
The market for high end computers will come down in
price before 3 to 5 years are out for the same reason
that the low end market is diving now: Higher integration.
Higher integration is not just a dry engineering concept.
The usual financial analysts just don't have the
engineering experience to understand the consequences.
I've worked through integration revolutions in several
industries now, and I know what happens.
Each year computers get a little cheaper due to slightly
higher integration. But every now and then, a revolution
occurs. Entire systems can suddenly be put onto a single
chip and prices drop suddenly and dramatically. Unit
sales increase, but not by nearly enough to counteract
the sudden decrease in ASPs. The revolution always
destroys the companies that have grown used to the old
high prices.
These revolutions always start with the smallest, cheapest
systems and then work higher up the chain. This revolution
started with the mobile computers, now desktops, next year
or two servers. There is no escape. Every company has
to take its lumps, and those who try to avoid losses by
concentrating on the higher ends get hit worst of all when
the integration wave finally runs through that end. It is
better to recognize what is going on, take your hits as
early as you can, and try to maximize the bang/buck in
the cheapest computer you can.
With DELL trading at such historically high multiples
of sales, earnings &c., now is an historic opportunity
to make money on the short side.
The next piece of news to watch for is the announcement
of the design of sub $1000 server quality computers.
We already have the announcement of sub $300 low end
personal computers, the servers are probably not more
than a year out.
Naturally, the bulls are going to argue that M. Dell is
a great genius who will solve all problems to the benefit
of the shareholders, but M. Dell has made mistakes in the
past, and will make them again in the future.
With the personal computer industry about to light up in
flames, there is no way that DELL will be left unburned.
It just isn't possible.
-- Carl |
