Skeeter Bug,
The drivers for price drops in retail and business has been similar for years and years, though. However, presently, the drop in retail box prices is fuelled primarily by:
1) cheaper CPUs and little memory
2) little software outside Web browsing capabilities
3) little to zero support
Hard to see the corporate world saving bucks by scrimping on software and opting to do the support themselves. Cheaper CPUs may find earlier acceptance if some corporate buyers can think out of the box, however, the cheaper CPU manufacturers need to stay in business and make money first. As for memory, 32 MB will not work for Win2000/NT5.
However, better technology will indeed cause business box prices to drop as it has in the past, which DELL has handled rather well. But it is hard to imagine that the drop be as steep as the retail sector. After all, browsing the web is not all that most of us do at work.
The argument sometimes presented is that other boxmakers may decide to drop corporate prices (to the point of making little to no money) to make up for revenue loss in the retail sector. This hurt DELL in the last quarter. However, this is also an unstable situation, unless we have irrational companies which prefer to lose money indefinitely. It seems that aggressive corporate sector price cuts by DELL's competitors is slowing down this quarter, from Kevin Rollins' talks yesterday.
-BGR.
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