Price cuts likely as PC market falters

The first six months of 2001 will witness a combative pricing environment in the PC market as suppliers struggle to maintain...

The first six months of 2001 will witness a combative pricing environment in the PC market as suppliers struggle to maintain profits in a climate of low demand and oversupply, says analyst group Gartner Dataquest.

Matthew Burgess

A new report by the group claims that because the bulk of current applications do not require the performance that will be delivered by Intel and AMD this year, "technology will have a weaker effect on computer demand than at any point in the industry's history."

The report goes on to paint a gloomy picture for computer vendors as a whole, citing factors such as economic uncertainty, technology saturation in key segments and transitions in technology usage models.

Bloor Research analyst Mat Hanrahan agreed with Gartner's cautionary analysis:

"The main problems we're facing at the moment are bandwidth and hype. Everyone talks about new technologies such as ADSL, 3G and Bluetooth way before the bandwidth is in place to support them, which is very dangerous. The industry seems to be suffering from post-IPO goldrush madness - what is needed now is long-term planning."

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