Major vendors IBM, HP, and Dell have responded to the price war in the chip market by cutting prices of PCs and servers this week.
Dell cut prices on its workgroup, departmental and enterprise PowerEdge servers by up to 29 per cent. For a Model 2200 workgroup server with a 300 MHz Pentium II processor, 512 MB of RAM and three 9GB hard drives, this will equate to a price drop from $9,324 to $7,724.
HP has trimmed prices by up to 25 per cent on its SME Netserver E45 range. This will result in street prices of between $1700 to $2300. A 266MHz Pentium II system with a 512 KB cache, a 4GB hard drive, an Ultra SCSI adaptor and a 24- speed CD-ROM will retail for around $2,300.
IBM?s cuts - effective from the 22 January - were made in the PC sector with prices dropping by up to 15 per cent on its PC300 series. Entry-level prices now start at #740.000 for a model equipped with a P166 MMX processor, 2.5 MB hard-disk drive and 2.5 GB hard drive.
Dave Vallante, senior vice-president of industry analysts IDC, said price cuts in the chip industry are the major catalyst behind the spate of discount PCs and servers. ?If you drew a pie chart of factors controlling the price of hardware, chips would make up about 85 per cent.?
He added: ?Price decisions are in some respects out of the vendors' hands.?
Intel sparked off the price war among chip manufacturers by dropping the price of its Pentium range earlier this month. Intel clone company Cyrix responded with a similar cut and most recently AMD announced plans to slash prices on its K6 range of processors.
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