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

To: John Koligman who wrote (158401)	7/8/2000 11:09:09 AM
From: calgal	Respond to of 176388

07/07/00- Updated 09:54 AM ET PC prices poised to climb for school, holiday sales Demand for components, diminished competition reverse falling cost trend usatoday.com By Michelle Kessler, USA TODAY After several years of falling dramatically, PC prices are leveling off and could even climb slightly for the coming back-to-school and holiday shopping seasons. Driving the trend: a shortage of computer components, a decline in the number of PC makers and lessening demand among consumers for the cheapest computers. More than 22.5 million desktop and laptop computers are expected to be sold in the USA in 2000, according to technology consulting firm IDC. Yet the average selling price of a home computer has varied little since December, when it rose from an all-time low of $939 to about $1,000, according to market tracking firm NPD Intelect. Among the reasons: PC manufacturing costs, which declined each of the past five years, are holding steady as enormous demand for components such as computer memory chips, microprocessors and liquid crystal display screens -- used in everything from cars to wireless phones -- keeps prices high. Sales of personal digital assistants, for example, have increased 139% this year, creating a seller's market for computer components. ''It's all of the handheld devices, the cellphones, the digital cameras. . . . Every personal device under the sun now requires memory,'' says Grant Jones, spokesman for Micron, the country's largest producer of semiconductor memory chips. ''Supply and demand is really what drives the pricing.'' An influx of components from foreign companies -- such as Taiwan Semiconductor and Winbond, which are ramping up production to meet U.S. demand -- will help relieve the shortage by next year, says analyst Roger Kay of IDC. Prices for desktop and laptop PCs in 2001 are expected to drop but not as steeply or as fast as in past years. Competition among PC makers has shriveled as companies, responding to the retail computer market's slim profit margin, pulled their PCs out of stores. At the end of last year, IBM and Acer each decided to sell home PCs only through their Web sites. Packard Bell NEC closed its consumer division entirely, allowing industry leaders Compaq, Hewlett-Packard and eMachines to capture 83% of the home computer market by May 2000 -- a 20-point market share gain from 1999, NPD Intelect says. ''There are not a lot of exciting choices out there right now,'' says Stephen Baker, vice president of market analysis for PC Data, an industry monitoring firm. ''There's less competition in the storefront, and stores can hold their prices.'' Popular features, such as recordable CD drives and DVD drives, have enticed shoppers more willing to invest a few extra dollars in their home computer, allowing manufacturers to keep prices steady. ''People are starting to demand those kind of things,'' says Tom Anderson, product marketing manager for Hewlett-Packard's North American division. And though prices won't go down anytime soon, consumers are getting more for their money this year. Compaq's current entry-level PC, for example, still sells for its 1999 price of $599, but has a faster processor, bigger hard drive, more memory and an enhanced keyboard.

To: John Koligman who wrote (158401)	7/8/2000 11:14:12 AM
From: Mike Van Winkle	Read Replies (1) \| Respond to of 176388

John, re: In comparing prices/features you really got more for your money with the Dimension . I remember the argument, but the thought I had was that price would come down. The article suggested that the higher price was related to the manufacturing cost, which killed that theory of lower prices in the future. The WebPC Smaller form factor to target desk space premium could be accomplished also with a lap top. It looks like the WebPC has no real niche for Dell at this time. There are other products that Dell is coming out with such as the elevator PC. I think the old PC workhorses will be around for a while longer. Any thoughts?