To: Meathead who wrote (9852 ) 11/30/1997 3:16:00 AM From: hpeace Respond to of 97611
NOTICE THE LAST SENTENCES A look at the sub-$1,000 PC Electronic Buyers News, Friday, November 28, 1997 at 22:46 (Published on Monday, December 01, 1997 at 00:00) by Jack Robertson The sub-$1,000 PC holds many surprises: - Not the least-significant market twist is that many U.S. PC makers have opened up a bargain basement instead of concentrating solely on higher-price models. That's not the American Way. Of course, margins on PCs in the several-grand range aren't all that high. Driving down price points to beat the competition and opening new markets is traditionally the Japanese and South Korean companies' game. Most of the Asian PC makers, however, are struggling to establish new operations and are lagging in the cut-rate PC charge. The exceptions are Acer Inc., NEC Corp., and Packard Bell. - Not unexpectedly, the three-digit price tag has opened up a big PC market. Every time the industry's prices burrow to new lows, the market rocks. International Data Corp. estimates that as much as 40% of consumer-PC sales are for sub-$1,000 models. Computer makers and their chip suppliers are hoping budget customers get bit by the PC bug instead of getting turned off by software bugs. The computer industry could help itself by moving quickly to plug-and-play capability for peripherals, communications, Internet, software, and multimedia. Low prices can only penetrate a new consumer market so far. Jane and Joe Six Pack aren't going to put up with PC Geekland, although their kids probably will. - The Asian economic crisis might ease the sub-$1,000 PC profit squeeze if trans-Pacific motherboard stuffers and contract assemblers use devalued local currencies to cut the prices they charge dollar-paying U.S. PC makers. Of course, the devalued currency enables Asian PC rivals to cut their prices as well. - PC vendors continue to benefit from a glut in memory chips. DRAM and SRAM suppliers and some chip-set suppliers ramped up production based on the PC industry's projections of a 15% to 18% jump in unit sales. But those PCs were supposed to take 32 Mbytes of main memory and high levels of cache, as well as gobs of graphics chip sets. It turns out that a huge chunk of PCs are memory-anorexic, and are not gorging on the global chip cornucopia. Well, just wait. The $800 PC of tomorrow will be today's 266-MHz Pentium II memory-hog graphics glitzer. And the new sub price could be