PC component prices up despite Intel8217;s price cut

MUMBAI, AUG 29: Contrary to popular expectation, personal computer PC prices will not drop in September. Although Intel slashed process...

MUMBAI, AUG 29: Contrary to popular expectation, personal computer PC prices will not drop in September. Although Intel slashed processor prices by 25 to 37 per cent last week, prices of all other system components including monitors, hard disk, motherboard and memory have gone up, according to industry sources.

The maximum price rise has been in the case of memory or RAM which has gone up by around 60 per cent in the last ten days. Other components have seen a 10 to 15 per cent rise in price. quot;Apart from the CPU processor all other components prices have gone up,quot; said an industry source. These components account for over 70 of the cost of a system.

According to Rajkumar Saraf, managing director of Zenith 8212; one of the top PC brands in the country 8212; the last two months saw a glut of memory chips in the market resulting in a drastic fall in prices.

quot;What we are seeing now is a correction,quot; he said. quot;Earlier, our dealer price was Rs 1,300. Now our purchase price itself is Rs 1,800,quot; revealed asupplier. Stocks in the grey market have also dried up.

The shortage is expected to continue in the coming months because the price crash in June-July hurt many manufacturers, according to an industry observer. The acquisition of LG Semiconductor, a major supplier of memory chips, by Hyundai Electronics Industries and the strikes preceding the merger is also reported to have impacted supply. quot;It is difficult to say if the situation will improve in the next couple of weeks,quot; added the supplier.

quot;We are somehow sustaining our prices,quot; said a dealer, admitting he might be forced to hike it marginally next week. As a market strategy, however, he proposes to give higher hard disk capacity of 6.5 GB for the new price. The shortage is especially pronounced in 4.3 GB capacity hard disks which are currently shipping with most systems. The market is now moving towards the the next slab of 6.5 GB and couple of GIDs are already offering this as the standard.

Said an industry observer, quot;system prices would haveincreased by 20 per cent but for Intel8217;s price cut. Luckily, both things rise in component prices and processor price drop happened at around the same time.quot;

Story continues below this ad

Zenith, which offered attractive discounts prior to Intel8217;s last price drop in May, has this time chosen to maintain it at existing levels and go for 5 drop.

Current GID prices are ruling between Rs 40,000 and Rs 45,000 for a Pentium III 450 MHz multimedia machine of standard configuration 32 MB RAM, 4.3 GB hard disk, 40x CD-ROM drive, 1.4 MB floppy disk drive. This includes the operating system Windows 95 or 98 and 56 Kbps modem in some cases.