Cheap PC's for the holidays?
With the delay of Vista, means an abundance of cheap pc's ready for a good home.

To Move Soon-to-Be-Dated Models,
Makers Sell at Rock-Bottom Prices

By CHRISTOPHER LAWTON and ROBERT A. GUTH
November 2, 2006; Page B1

For personal-computer makers, the new year can't come soon enough. Until then, the normally healthy holiday season might look like a going-out-of-business sale.

That unpleasant prospect stems from Microsoft Corp.'s decision earlier this year to delay the broad introduction of its Windows Vista operating system until next January. The news struck a blow to Hewlett-Packard Co., Dell Inc., Gateway Inc. and the rest of the $200 billion U.S. industry, which for decades had enjoyed the tailwind of a new release of Microsoft software -- particularly when it coincided with the holiday selling season.

Now PC makers are scrambling to entice consumers to open their wallets and not wait until the end of January, when Vista is expected to be available to consumers. Some of the planned incentives are typical -- larger screens, bigger hard drives and new hardware colors -- but many industry observers say the most powerful sales tool will also be the most painful: rock-bottom prices.

Current Analysis, a research firm that tracks weekly PC sales, estimates that, thanks in part to Vista's delay, 70% of notebook PCs sold this holiday season will be priced at less than $1,000. That compares with just 38% of notebook PCs at less than $1,000 in 2004. "It's going to be a blowout sale," says Samir Bhavnani, research director at Current Analysis

At electronics retailer Circuit City Stores Inc., the price of 17-inch-wide notebooks is falling to less than $1,000 from about $1,300 a year ago, says Elliot Becker, vice president and merchandising manager of technology. In September, Sony Corp. started offering its N-series notebook at less than $1,000 for the first time.

"We expect to see the apex of price degradation to occur this holiday," says Mike Abary, vice president of marketing for Sony's Vaio PC brand.

The price slashing underlines how the PC industry continues to be dependent on new Microsoft software. Vista is the biggest overhaul of Microsoft's operating system in 10 years, when the Redmond, Wash., software maker cemented its PC-software monopoly with the hugely successful Windows 95. Its new operating system includes features such as better ways to search for information on a PC and what Microsoft says is vastly improved security. It will be available to big businesses at the end of this month and more broadly in late January.

Read all about it here, courtesy of online.wsj.com:

-Eric