Sun, Jul 05, 2009

Business

Disappointing sales signal better deals for PC buyers

By Jessica Mintz
The Associated Press
Tucson, Arizona | Published: 10.26.2008
SEATTLE — Sales of personal computers didn't live up to expectations over the summer, and now analysts predict shoppers will cut spending even more drastically in the all-important holiday quarter.
So far, PC prices appear to be holding steady. But buyers may get better deals soon as computer companies try to avoid getting stuck with a pile of unsold inventory on Dec. 31.
Analyst Roger Kay of Endpoint Technologies said the unofficial start date for holiday PC promotions has crept earlier in recent years. This year, Kay said, computer makers are feeling panicky and wondering if they'll even make it through October without slashing prices.
"People with a lot of money are still going to come out and buy whatever they want," Kay said.
PC makers generally reap thin profit margins, so don't expect prices to drop precipitously. In addition to whatever price cuts they do make, companies also are likely to offer more package deals that include free software or hardware add-ons to make more expensive machines look like a better deal. They may also rely on the age-old practice of luring shoppers with a low-end, cheaper configuration but try hard to sell them pricier machines.
Four of the top PC makers, Dell Inc., Hewlett-Packard Co., Acer Inc. and Lenovo Group Ltd., wouldn't comment on prices or new products set to launch in coming months. HP's marketing efforts have focused recently on the TouchSmart line, touch-screen PCs that range from $1,300 to more than $2,000. The No. 3 U.S. computer maker, Apple Inc., already unveiled its holiday season lineup, with only modest price cuts, such as trimming the lowest-priced MacBook to $999 from $1,099.
"We don't know how to make a $500 computer that's not a piece of junk," Apple CEO Steve Jobs said Tuesday.
Complicating predictions about PC price cuts is the rise of "netbooks" — cheap, compact laptops meant for Web surfing, without the power and features of many full-priced notebooks. Many netbooks offer a choice between an open-source operating system and Windows XP — another possible point in the small devices' favor now that XP has all but been replaced by the less popular Windows Vista on full-featured consumer PCs.