PCs to outsell TVs in 2000, Intel exec says

Worldwide PC sales will overtake television sales next year, driven by the availability of low-cost computers and the popularity of the Internet, predicted Paul Otellini, executive vice president and general manager of the Intel Architecture Business Group, in a speech at the Intel Developer Forum yesterday.

Last year in Australia, Canada, Denmark and Korea, PC sales already outnumbered sales of TV sets, he said, citing various industry sources. Intel expects that trend to be mirrored worldwide before the end of 2000, Otellini said.

At the same time, the popularity of low-cost PCs is driving down the average price of PCs, the Intel executive said. In last year's third quarter, sub-$US1000 PCs accounted for almost a quarter of worldwide PC sales, he said.

Analysts say Intel was caught off guard last year by the sudden surge in interest in sub-$US1000 PCs, helping rival Advanced Micro Devices gain some market share at Intel's expense. Intel has pulled its socks up since then, and is engaged in an aggressive price struggle with AMD to win back its lost share.

"We see that value PCs are a real part of the business, not just an aberration," Otellini said. While the budget PC has been largely a consumer phenomenon so far, "we believe low-cost PCs will come to the business market in the next couple of years," he said.

Intel defines "budget" PCs as those costing below $US1200.

While sales of low-cost desktop PCs continue to grow, users can expect to see the price of notebook PCs drop, too, he said. Over time, the price of an average low-cost notebook will fall from $US1900 to $US1500 to $US1200, he predicted.

"We're working with our industry partners to find the next price point. Maybe it will be $US999, we don't know, but we want to make sure we have the products in place to support that (lower price point)," Otellini said.

Intel also outlined plans for new processors and chipsets, some of which are designed to help it capitalise on the budget market. In the second half of the year it will increase the speed of its Celeron desktop processor to 500MHz, and jack up the speed of the mobile Celeron to 400MHz, said Albert Yu, senior vice president and general manager of the Intel's Microprocessor Products Group.

Meanwhile, the industry must work hard to attract the roughly 80 per cent of homes worldwide that don't currently own a PC, he said. Despite the challenges, worldwide PC sales will continue their double-digit growth march unabated, he predicted.

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James Niccolai

PC World

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