Cuts from Intel on Fast Ethernet network interface cards (NICs) have started a price war with 3Com slashing prices on its range of XL 10/100 PCI cards to prices starting from $94 in 100 packs. 3Com is also offering reductions on single units as well as cuts on five, twenty and sixty packs.
The price slashing started after Intel took a pre-emptive decision last weekend to cut prices on its range of Fast Ethernet units. Intel wants to grow its market share in the lucrative Fast Ethernet market and has spare manufacturing capacity it wants to utilise.
At present market figures indicate that 3Com holds around 33 per cent market share, Intel around 20 per cent and Compaq 15 per cent. The rest of the market is shared out amongst a multitude of vendors, with IBM holding a relatively small share.
But the news is likely to cause further shudders on share prices of networking stock. (See other 3Com story today) and is likely to have ramifications not only in the Fast Ethernet arena and affect ordinary prices.
Graham Stewart, product marketing manager of networking at Compaq UK, said: ?The reason for the price cuts is that this has been a lucrative market for some time. The number of networking PCs is increasing and there are also network ready PCs.?
He said Compaq was increasing its market share. ?Our goal is to be number two in this market by the end of the year,? he said.
Compaq will not respond to the price wars because its pricing for NICs was lowered in January. ?We believe our prices are still competitive,? he said.
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