Regardless of the market sector, PC sales took a beating this year. The channel heard a collective thud as markets worldwide dropped and PC vendors scrambled to restructure their operations. The general consensus is that end users, still riding on systems put in for Y2K compliance, have had very little reason to upgrade. Not surprisingly, PC components have also had a roller coaster of a year as oversupply forced prices down. Undoubtedly the memory market suffered most, with manufacturers bleeding money as DRAM prices continued their inexorable slide. The recent spike is largely seen as an unnatural occurrence that will not be sustained in the long term since demand remains flat.
The slow sales have meant PC prices have reached an all-time low, and business is so competitive that organisations have begun dictating prices for tenders. The white-box market was able to capitalise first on low components prices to deliver inexpensive systems; consequently market share in this segment is up. Assemblers are hoping the launch of Windows XP in October and the release of Intel's P4 chipset for use with the ultra-cheap SDRAM will stimulate sales, and early figures suggest this is the case. Intel has been caught by surprise by the demand for its new chipset, but supply constraints should ease over the next couple of weeks. However, the next price drop on desktop chips is not until January 27.