2nd half-year to see computer prices slashed

James Renwick,Special to The China Post

With U.S. computer retailers expecting a 30 percent drop in Q2 sales from Q1, both European and American computer manufacturers are sounding the first sirens of a price-war. After positive forecasts for a return in the world economy, it appears that the rebound will be far below expectations, especially in computer sales. And this could mean heavy price slashing in the second part of the year. According to the latest computer industry report from Solomon Smith Barney, in April retailers in the United States recorded a 36 percent fall in sales compared to March — more than the 25-30 percent decline on average for the last four years — showing that computer retail is slipping in terms of sales. Predictions of a big bounce back in the world economy have proved rather premature, causing Q2 sales to go down by a big margin. As for the much-hyped Q1 recovery in the global PC industry, institutional investors noted it was just a perceived image fueled by retailers’ effort to take in more shipments following high demands in Q4 last year. Q2 sales of desktop PCs have declined by a greater margin than from the past as notebook PCs featuring Intel’s new Pentium 4 (P4) processor become cheaper and laptops with desktop processors are on the rise, driving people to replace their desktop PCs with notebooks. European and American computer experts say Q2 is traditionally a slow season. They say IBM and Hewlett-Packard’s stock inventories are both above predictions, and even Dell has reported lower second quarter sales. In order to stimulate the market those in the know are predicting big-time price dumping.

The Institute for Information Industry (III) forecasts that this year shipments of desktop computers in Taiwan will reach 26 million units, a slight growth of 3.7 percent from last year; shipments of notebook computers will reach 17 million, a growth of more than 10 percent.