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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: calgal who wrote (154400)	2/28/2000 11:19:00 PM
From: rudedog	Respond to of 176387

Leigh - In December and January, PC makers were all constrained to some extent by supply of key components - so they had little incentive to take any price action, they were already selling more than they could make. There was a shift in December to lower priced models - a seasonal result of the Xmas sales of low priced consumer machines - which partially offset the increase in ASPs, but as the author says, the very lowest price products did not sell as well as in the past. Also, the "legacy free" machines that I think will move commercial desktop ASPs down were only sold in the last week of January, and only by CPQ, and not at retail. In both December and January, the vendors who sell most into the consumer space were shifting low end processors into commercial desktop lines, and filling in with higher priced consumer models at retail. CPQ, for example, sells only Intel-based commercial machines, so to keep filling orders in the commercial market, they shift a higher percentage of product mix to AMD Athlon based consumer boxes. In CPQ's case, the shortage of Intel processors allowed them to shift upscale to the 700MHz and 733 MHz Athlon based machines - those are at the high end of the cost spectrum. That pattern will continue until Intel gets enough production to meet demand. A key factor in this study which is not obvious from the data is that the volumes sold at retail in January are a fraction of December volumes, so price trends are hard to figure - depends a lot on what was left over from Xmas (not much this year) and what models those were (higer priced, because that's all they could get processors to build).