PC prices to continue falling, chip vendors predict

PC prices to continue falling, chip vendors predict

Already at historic lows, PC prices are set to hit even lower price points over the coming year, as microprocessor advances promise to bring more performance to low-cost PCs, officials at chip vendors predicted at last week's Computex '98 trade show in Taipei.

As microprocessor vendors such as National Semiconductor's Cyrix unit and Integrated Device Technology's Centaur Technology continue to integrate more functions onto their silicon, users can look forward to sub-$US500 PCs before the end of the year, and lower still by next year, officials said.

"The epicentre of this industry turmoil is right here in Taiwan," said Brian Halla, president and CEO of National Semiconductor, referring to what he called the critical role the island's manufacturers have played in bringing down the cost of PC hardware. "Taiwan has become the centre of the PC universe."

Eventually this relentless drive towards lower PC price points will lead to PC-compatible "information appliances" replacing traditional PCs, predicted Halla. "The new PC is the PC that will enable the information age," he said.

But such low-cost information appliances will still have to be compatible with Microsoft's Windows operating systems because of the popularity of the platform's applications among users, said Halla.

To put more reality into his vision of huge volumes of cheap information appliances replacing PCs as we know them, Halla outlined rollout and technical plans for future National Semiconductor/Cyrix processors that by mid-1999 will result in a sub-$US100 PC-on-a-chip.

Traditional PC prices, meanwhile, will also reach new lows later this year.

By Christmas, for example, several of IDT's PC maker customers will bring out full-fledged PCs with most of the latest PC technologies, such as MMX, accelerated graphics port (AGP) 3-D graphics and a 100MHz system bus at a recommended retail price of $US500. This often includes a 15in monitor, said Joe Baranowski, vice president of sales and marketing at IDT's Centaur Technology subsidiary.

"These $US500 PCs won't be from first-tier vendors, but there will be quite a few of them in the second and third tiers," he added.

By next year, $US399 price points may become a reality, and that will mean he processor cost must reach new lows of somewhere around $US40, Baranowski predicted.

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