A battle between the world's two biggest microprocessor makers and oversupply in the LCD panel industry have sent prices tumbling. Users should see the mark downs showing up in stores any
time.
"Over
the next few months buyers can expect to continue to see PC bargains as
the industry clears stock of older inventory," said Charles Smulders,
managing vice president of Gartner's client computing group. He said
the fourth quarter might also offer good buying opportunities as PC
makers try to keep up sales prior to the launch of Windows Vista early next year.
Longer term, price declines and performance improvements will return to a more normal rate, meaning users should take advantage
of the current window of opportunity.
Intel and Advanced Micro Devices (AMD) both halved prices on some desktop PC microprocessors this week, part of a price war between the two chip makers.
The
cuts included some top-end chips. For example, Intel pared its Intel
Pentium D processor, the 960 that runs at 3.6 GHz, to $316, from $530,
while AMD reduced the price of its dual-core Athlon 64 X2 5000+ to $301
from $696.
Price
competition is the latest weapon the two companies have turned to in
their fight for microprocessor market share. AMD has gained on Intel
over the past few quarters due to the launch of some advanced
processors, but Intel has come back recently with new offerings of its
own.
Since the processor is the most expensive component inside a PC, the mark downs should translate into value for desktop PC
buyers in a combination of better prices and technology.
A
bonus for users is the falling price of LCD panels. Several huge
companies churn out the screen part of a monitor or notebook, ensuring
cutthroat competition and low prices almost all the time. But recently,
flagging demand for desktop monitors and LCD TVs has caused inventories
to rise and prices to drop.
Many PC buyers even put off purchases last month in anticipation of the microprocessor fire sale. The stall in demand caused inventories to rise further, cutting
into company profits.
AU Optronics, one of the largest LCD panel makers in the world, blamed falling panel prices for its profit shortfall in the
second quarter. It expects prices to continue to decline during the third quarter.
A price rebound could come sometime in September, said Hui Hsiung, an executive vice president at AU, during its second quarter
investors' conference early this week.
The
price of larger sized panels fell by around a fifth during the three
months ended June 30, compared to the previous quarter, according to
market researcher WitsView Technology. The company noted the price
declines on most larger sized screens continued to decline or remained
flat in July.
Falling
prices for panel makers should lead to more bargains for users looking
for nice, sleek LCD monitors for their desktops. It's a buyers market
for desktop PCs and monitors right now, and it should remain so for the
next few months.