Microchip price cuts may take the sting out of dearer memory

Updated: Jan 22 2002, 05:30am hrs
If you are planning to buy a computer some time now, three words of advice you could use: Dont Rush In. PC prices look set for a roller-coaster ride in the near term following the recent increase in the cost of memory chips and an anticipated drop in the microprocessor prices.

Market sources indicate that Intel will announce price cuts on microprocessors in next few days and the drop could offset the increased cost of memory. Experts feel that PC prices, volatile now, will stabilise only after the new processor prices are known.

When contacted by The Financial Express, Delhi Intel dealer P K Sharma confirmed that microprocessor price cuts were expected any day. Intel is expected to announce new prices some time later this week or early next week, he said.

Indian players like Vintron, Zenith and HCL are also holding their decisions to pass on the memory price hike and waiting for the drop in the processor prices. These companies want to avoid any price hike to remain competitive in the grim market conditions.

We have not increased the prices as yet. In fact, we are waiting for the new prices of micro-processors and may not increase the prices at all if drop in processor prices offsets hike in memory prices, said Vintron director Manish Agrawal. The HCL Infosystems spokesperson said the company had not increased prices so far and was closely watching the market.

However, multinational PC manufactures like Compaq, Hewlett-Packard (HP) and IBM that have already jumped at the opportunity to announce the new price lists to pass on the hike in memory cost, may also pass on some benefit to the consumers of the microprocessor cuts.

When contacted, HP country sales manager for business PCs Subin Joseph said that the company would not revise its price again but the consumer will benefit in terms of a powerful processor at the same rate.

However, IBM country manager for PC division Shashi B Mal said that IBM will pass on the benefit in high end processors based systems to its consumers. The assembled PC prices that have gone up by Rs 800 to Rs 1,200 after the memory price hike, will also come down to adjust the drop in processor prices. Assembled PC market is very flexible and will immediately adjust the prices to the ups and downs of the cost of components, said Momentum Infocare director Sanjay Agrawal. Momentum operates in PC, Peripheral and system integration market in Delhi and sells PCs under its own brand name also.