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PC prices decline after Intel lowers cost of processors

Prices on desktop and notebook computers are coming down after one of the world's top chipmakers slashed microprocessor prices in an effort to stimulate market demand, an insider said yesterday.

Microprocessors are the central processing unit in a computer containing the logic circuitry that performs the instructions of a computer's programs.

"Although Intel Corp cuts its processor prices almost every quarter, this time it made a more significant discount ... especially on high-end products," said Lin Chun-chien (林俊堅), assistant vice president at Synnex Corp (聯強國際), a computer retailer with more than 1,000 distributors in Taiwan.

Intel announced it new pricing strategy last week, citing up to a 52 percent discount on processors for desktop PCs and an up to 44 percent cut on notebook processors, effective Sept. 1.

An Intel Pentium4 with 2.4GHz processor, originally priced at US$400 now sells for US$193.

Consumers may soon enjoy a nearly NT$6,000 drop in retail prices on computers, Lin said.

Synnex has already reduced the price on its Pentium4 equipped, 2.4GHz desktop computer from NT$38,000 to NT$31,900.

"With Intel axing prices on higher-end products the most, this is a good opportunity for consumers to upgrade their processors," Lin said.

Foreign companies, however, said they don't have any plan to slash prices anytime soon.

"We knew Intel was going to cut processor prices, so IBM Taiwan already made its price adjustments at the computer show in August," said Lisa Chen (陳慧純), a marketing executive at IBM Taiwan.

The company cut NT$3,000 to NT$5,000 off its Pentium4-equipped notebook PCs during the Taipei Computer Application Show last month.

HP also offered big discounts at the show, and it may reduce prices further.

"Consumers are expecting to see computer prices drop after realizing Intel cut processor prices ... if we don't offer further discounts, the company may miss this opportunity to boost sales," said Dennis Chen (陳敬宏), group sales manager at HP Taiwan.

The sluggish economy is hampering consumer spending, so computer retailers are taking every chance to persuade shoppers to open their wallets, he said.

Later this week, HP Taiwan plans to lop NT$2,000 off of all of its Pentium4-based notebooks.
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