Eye on value
During the holiday season, PC makers will aim to tap into the perception of value, using notebooks, bundles of desktops and flat panels, and computers focused on multimedia, games and photography. Because these products generally carry higher prices, they can help shore up PC makers' profits.
"You'll always have entry-level (PCs), but I think a lot of brands are trying to get to the $799 (£508) and $899 buyer by saying, 'for a few hundred more, you can get a lot of extra technology,'" said Sean Aryai, marketing director at Systemax, a PC maker.
Systemax and others are likely to launch desktop-with-flat-panel bundles for prices near $900. These bundle would combine a 15-inch flat-panel with a desktop that includes features such as a DVD burner and up to 512MB of RAM, Aryai said.
"I'd expect to see aggressive bundles with a PC and a flat panel," said Tom Anderson, vice president of marketing for HP's consumer PC division. "What the price will be is too early to tell."
Companies do run the risk that this value approach will fail to motivate enough consumers to buy new PCs, especially if component costs don't cooperate -- and there's little room to manoeuvre.
Ideally, manufacturers would slow price decreases or even raise prices in some areas to match slower component cost declines and higher prices on parts such as DRAM (dynamic random access memory). But competition among vendors keeps PC prices heading downward. PC makers are, instead, more likely to reconfigure their PCs with smaller amounts of memory or to change other components to help hold prices steady. They may also back away from the lowest price points in the market.
Some have already shifted their strategies because of changing component prices. Components are expected to continue to decline in price on the whole. But rates of decline are likely to slow to half a percent per week from earlier rates of 1 percent or 2 percent per week, Dell said recently.
