NEC Corp and IBM Japan Ltd say they've been forced to backtrack on price increases made three months ago for their personal computers because the higher prices hurt sales just as demand began to recover.
NEC, Japan's biggest personal-computer maker, cut the prices of its LaVie and Valuestar models last month, spokeswoman Aki Ota said. The Japanese unit of International Business Machines Corp set the price of its NetVista desktop computer about 10 percent lower than similar models, spokeswoman Yuko Takeuchi said.
PC makers in Japan and elsewhere raised prices in April to keep pace with increases in the cost of liquid-crystal displays and memory chips. Retailers say consumers balked, a finding supported by the fact that PC sales have failed to recover.
"The expensive models that debuted in April and May didn't sell well and we are giving a discount on them," said Takuya Kiuchi, a store clerk at Bic Camera, one of the biggest electronics retailers in Japan. "Consumers are sensitive."
For some investors and analysts, the rollback of price increases signals that hopes are fading among PC makers for demand to return this year.
Industrywide PC sales fell 0.5 percent to 31.1 million units in the three months ended June 30 from a year earlier marking the fifth consecutive quarterly decline, market researcher International Data Corp said in July.
In light of sagging demand, Apple Computer Inc cut the prices of its flat-panel iMac computers by as much as 7.1 percent on Tuesday last week. Prices were reduced after iMac sales fell short of Apple's forecasts, the company said.
Dell Computer Corp is no more optimistic. Executives at the world's second-largest personal-computer maker last week said that while Dell's third-quarter shipments will rise 5 percent from the second quarter, industrywide shipments will be unchanged to just slightly higher.
The selling price of flat-panel screens rose a few months ago as PC makers who bought fewer parts last year worked off inventories. Liquid-crystal display prices have since fallen earlier than most manufacturers had expected.
The market price of LCDs measuring 15 inches for PC monitors rose to US$260 in June from about US$200 late last year, Heihachiro Ochiai, a spokesman at Sharp Corp. said. Prices started to fall last month, declining to low as US$240 by the end of July, he said.
Computer-memory chip prices have also declined. The price of the benchmark 128Mb dynamic random-access memory chip has plunged almost 60 percent since early March to below US$2, according to DRAMeXchange.COM.
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