Cisco drops hardware prices by 15 per cent

Cisco drops hardware prices by 15 per cent

Networking vendor follows Sun lead in reversing price increases initiated when the Aussie dollar dropped

Cisco has become the second vendor in recent weeks to drop its hardware prices after raising them as the Aussie dollar dropped sharply at the end of 2008 against the US and Japanese currencies.

Effective August 17, the networking giant has reduced the list price of its hardware products by 15.25 per cent and decreased a handful of service prices.

In a written response a Cisco spokesperson said the company “frequently reviews and adjusts product and service pricing to extend our customer’s dollar and deliver greater value. This is part of our continuing effort to deliver products with compelling price/performance solutions for our customers and partners".

The spokesperson did not elaborate on whether the price drop was directly related to the rise in the Aussie dollar, which at time of publication was trading at just over $US0.82 and 77 yen.

Prior to March the domestic currency suffered six months of stagnation around the $US0.60-$US0.70 mark. The fluctuations followed a 30 per cent fall from a 25-year high $US0.98 in mid-July last year.

In mid-December ARN reported Cisco intended to raise prices on all products by 18 per cent in reaction to the fall of the Aussie. At the start of May, Cisco also increased prices on technical services for select end-of-sale products. About 1500 out of about 50,000 SKUs were affected by the price increase, which was mostly between 15 to 25 per cent.

The Cisco move follows that of Sun Microsystems, which in late June, dropped the cost for all its products by an average of 11 per cent. In February, Sun raised prices by 15 per cent in the midst of the financial crisis.

Acer is another vendor that raised prices – by 25 per cent – during the height of talk on the economic downturn, but representatives for the company could not provide comment by time of publication as to whether it too was considering dropping prices now.

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