|PC Price Cuts|
|Topic||Supply and Demand|
|Key Words||Sales, Recovery, Recession, Price, Rebates, Demand, Budgets, Consumers|
Personal computer sales are showing signs of a recovery. They had declined during the holiday season of 2000, and worsened as the recession continued and the September 11 attacks occurred. But, since Thanksgiving 2001, a mild surge has been evident in stores, on the Web sites, and through direct sales. Hewlett-Packard reports a 20 percent increase in sales over Thanksgiving.
Sales are rising in large part because of steep price discounts and rebates. Dell has been the leader in price cuts, aiming to prompt consumers to buy faster computers or add more machines. Another tactic has been to reduce the price of other electronic products, such as digital cameras, color printers, and scanners, when bought with a new home computer.
The increase in computer sales has occurred in spite of the significant growth in sales of home entertainment systems and devices such as DVD players, surround-sound audio systems, and wide-screen televisions, encouraged by large price cuts and a trend toward staying at home instead of going out for entertainment.
However, computer demand is unlikely to rebound on a sustained basis until businesses restore their technology budgets and applications require faster machines. It is also expected that when prices rebound, demand will slump again. Consumers are likely to wait for good deals to appear again.
(Updated January 15, 2002)
|Source||New York Times, "Computer sales brighten a bit," St. Petersburg Times, December 10, 2001.|
Return to the Supply and Demand
©1998-2002 South-Western. All Rights Reserved webmaster | DISCLAIMER