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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: gnuman who wrote (46682)	1/29/1998 12:07:00 PM
From: Jules V	Respond to of 186894

The sub $1000 PC trend is hardly new material on this thread. But, there is a good discussion, and some interesting opinions, regarding the low cost PC trends at this link: byte.com Also opinion on IA-64, non-intel processors. Excerpt: As if all that weren't enough, there's also an alphabet soup of new technologies intended to completely overhaul today's PCs: 100-MHz system buses, the Accelerated Graphics Port (AGP), AGP-2x, AGP-4x, synchronous DRAM (SDRAM), Double Data Rate SDRAM (DDR-SDRAM), Rambus DRAM (RDRAM), DVD-ROM (digital versatile disc), DVD-RAM, the Device Bay interface, MMX2, the slow eclipse of ISA, faster/wider PCI, ISO-1394 FireWire, universal serial bus (USB), Fast Ethernet, the Advanced Configuration and Power Interface (ACPI), Ultra DMA, Ultra 2 SCSI...and more...and more. Users Revolt There's growing evidence that computer buyers, both consumer and corporate, are reacting to the uncertainty over these changes. Although they're buying more computers than ever before, they're spending less money on each computer -- often, much less. According to market researchers at Computer Intelligence (La Jolla, CA), about 70 percent of the PCs sold through U.S. retail stores in recent months cost less than $1500. Even more remarkable, 30 percent to 40 percent cost less than $1000. A year ago, only about 5 percent of PCs cost less than $1000. What was once an insignificant crumb has suddenly become the whole cake. In the dealer channels that serve mainly corporate buyers, average prices are a little higher -- but still, a third of these PCs sold in recent months cost less than $1500. In December, Hewlett-Packard introduced a Vectra-series PC for the corporate market at a base price of $999. Of course, everyone likes a bargain. But in the past, users resisted low-priced PCs because they feared the machines would become obsolete too quickly. Now they're resisting high-priced PCs because they fear those machines will become obsolete too quickly. "People have fought this fear of obsolescence for a long time, and they've given up," says Matt Sargent, an analyst at Computer Intelligence. "No matter what kind of PC they buy, it's going to be obsolete in two years anyway. So they'd rather spend less on the PC and replace it more often." This signals a major upheaval in PC purchasing habits. For years, the standard computer-magazine advice has been to buy the most powerful PC you can afford as protection against early obsolescence. That advice is now obsolete. So much new stuff is coming that early obsolescence -- indeed, instant obsolescence -- is inevitable. No amount of money you spend today will protect you against it. -------- The question is what impact does this have if true. Gross margin guidance to 55%?. So the next question might be is how much is gained by price "elasticity".