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To: SecularBull who wrote (33605)	3/10/1998 2:11:00 PM
From: XoFruitCake	Read Replies (3) \| Respond to of 176387

I tends to agree with Jim that the problem lower PC ASP price is not unique to CPQ. I just saw an ad in San Jose Mercury news from Gateway advertising their G6-300 (300MHZ Pentium II, 32M SDRAM, 4M video card, 4G ultra DMA, 32x CD-Rom, 17" monitor)for $1,999. I can't even get this price a month or so ago for 266 Pentium II from Dell, gateway, or even compusa build-to-order PC. Every PC maker including Dell will cut their price to march this new price or loss sales. I don't believe there are big drop in component price in the last month to justify this price drop. The question is then how would all the PC makers maintain their margin (and hence the profit) given this kind of price drop. Any thoughts? Another question that I run through my mind is that why would Gateway 2000 drop the price? I guess the obvious answer is that they are not see the demand for their machine. HP also has very attractively priced machine in Compusa. So would it be possible that we are actually seeing a supply/demand imbalance driven price cut that will affect the profit margin of all PC makers? MW