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Cheaper chips won't push system prices down

Cheaper chips won't push system prices down

Local builders are claiming recent price cuts across Intel's entire line of processors will see many offer higher powered performance systems, rather than bring overall prices down.

Earlier this month, the vendor dropped the prices of its processors across the board. The move follows the launch of several new CPUs, including the Merom mobile processor. Further cuts are also anticipated in late July following the official release of the Conroe chip.

Plus Corporation managing director, Nigel Fernandes, forecast the lower component costs would stimulate PC sales by bringing prices down.

"I think we're in for a real buyers market," he said.

However, Altech national sales manager, Kevin Hartin, said system prices overall would not be effected by Intel's reduced prices. Instead, he expected builders would retain current price points, but offer better processors in existing system configurations.

"In the channel people expect a level of performance at each price point, so you'll see performance increased for the same price, rather than price cuts," he said.

Synnex product manager, Jason Lee, concurred with Hartin's assessment for mid- and high-end machines, but claimed budget PC models would fall. "At the entry-level, we're competing with tier one companies, such ad Dell, and machine prices will have to come down," he said.

Lee said Intel processors were being slashed by 10-50 per cent, with the average falling 30-36 per cent.

Pioneer managing director, Jeff Li, said that the processor price cuts would be reflected in the overall costs of its PCs due to its built-to-order system. He said it was also a good time to be building boxes due to the competitive advantages of local versus foreign manufacture.

"When Intel changes its prices we have an advantage as Acer and HP have to pre-build the systems overseas then ship them to Australia, which can take a few weeks," he said. "We can just drop the price the same time."

Altech's Hartin said the one area where it might pass on direct costs savings on Intel processors is in the area of its Media Center-based PC line.

"What we're doing in light of the lower prices is using some CPU savings to help fund the 12-month warranty on the machines and also bring retail price points back to $100 cheaper than they were three months ago," he said.


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