Posted on: Monday, April 1, 2002

TECH TIPS
Keep an eye on rising PC prices

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When Apple Computer hiked prices by $100 on its new iMacs last month, some folks wondered if other computer makers would follow suit.

That could happen in coming weeks and months as PC makers across the industry are dealing with a sudden spike in prices for memory and liquid crystal displays, which are used in notebook screens and the flat-panel monitors that are growing in popularity.

News out of Asia last week put NEC Computers, Fujitsu and IBM Japan on the list of companies that are either rolling out price hikes or planning them as early as next week.

Dell Computer, chief instigator in the recent PC price wars, is not simply raising prices across the board. Instead, Dell is cutting the perks.

Just a few months ago, Dell, Apple and other PC companies were doubling customers' DRAM memory for free. Some also offered to upgrade regular CD-ROM drives to CD-burners for free. Such deals are now harder to come by, as PC makers try to pinch more pennies to protect profit margins.

Roger Kay, director of client computing with high-tech research group IDC, noted that price hikes surrounding memory would likely have short-term effects and wouldn't create a big problem for PC makers, who can easily halt the free memory upgrade promotions.

"They can pull 256 MB and make that the standard," he said. "They can offer the extra 256 as an option that you pay for."

But the LCD price hike could have longer-lasting effects, he said.

Samsung Electronics, which brought the price of its flat-panel monitors below $400 last year, hasn't yet raised prices, but instead has started eliminating rebate programs.

Last year, manufacturers saw their prices for LCDs drop from $300 for a 15-inch unit in the first quarter to about $190 by the third quarter.

Late last year, prices started creeping up and are now closer to the $250 range, said Rey Roque, a vice president at Samsung Electronics.

"Basically, it's because of the demand," he said. "There's been an increased demand for notebooks. And what we've found on the monitor side is that $399 is a fairly explosive growth point for the 15-inch screen."

The price cuts for flat-panel monitors last year sparked interest among consumers — and they flocked to the shelves for the space-saving screens, which are easier on the eyes than traditional boxy CRT monitors.