PC Prices Keep Falling

Stella Kao

System vendors in Taiwan that have traditionally dropped prices once or twice a year are now slashing them every two or three months. Intel's top-of-the-line Pentium II chip can be found in systems costing as little as $1500 in Taipei, down from $2000 in the second half of 1997. And prices are expected to continue to plummet.

Synnex Technology International Corp., the largest PC distributor in Taiwan, attributes the price erosion to aggres sive pricing by Intel and to the Asian financial crisis.

Intel cut the price of its 233-MHz Pentium II in January from $400 to $268. By May, the Pentium II/233will be priced just above $200, vendors say. Taiwan makers say the motive behind the drastic Pentium II price cuts is that sales of systems based o n this processor remain below Intel's internal expectations. Intel wants to move users to its newest CPU as quickly as possible.

Recently, Acer Sertek -- an affiliate of Taiwan's largest computer maker, the Acer Group -- cut its prices by as much as 50 percent on top-end PC systems. The AcerPower with a 233-MHz Pentium II processor, 3.2-GB hard drive, and 32 MB of RAM is now priced at $1550, while the mainstream Pentium MMX units are now listed at below $1000.

As for the global market, there is still an oversupply of PC systems. Vendors in Taiwan expect PC prices to continue to tumble. In fact, makers foresee the average selling prices for mainstream systems falling far below $1000 this year if the Asian financial turmoil worsens. It's definitely a good time to buy a PC, said one vendor, adding that "it's a buyer's market."