Evesham Micro has joined forces with US Intel clone chip makerke hold. IDT-Centaur to introduce a budget PC that will sell for #350 by the end of the year.
The deal marks IDT-Centaur's first big European OEM win and, according to some observers, was likely to force chip companies into another round of price cutting as the budget PC market in the UK takes off.
The PC will be aimed at consumers and low-end business users and will cost #399 when launched in September, dropping to #350 in the fourth quarter.
Luke Ireland, director at Evesham, denied the decision to use Centaur's P200 Winchip processor was a snub to Evesham's other chip suppliers. 'Neither AMD nor Intel have a similar product at that price level, so they can't complain,' he said.
Rana Mainee, AMD European planning manager, disagreed that chip prices would be forced down further as PCs become cheaper in the UK. 'There is no pressure on the processor price because the additional business is incremental. The market is growing as more people are able to afford them.'
But Shiraz Jessa, sales and marketing director of Watford Electronics, which is also planning a sub-#400 PC in the next three months, said the move would put pressure on all chip companies. 'It will bring in a huge number of customers that the likes of Intel, IBM, AMD and Cyrix can't ignore,' he said.
Mark Davison, processor product manager at distributor Datrontech UK, said: 'The pricing does not surprise me. There will be a gunfight in the base end of the PC market. This will give all of our customers a run for their money.'
An IDT-Centaur representative said the decision to enter the European OEM market at the low-end was an extension of IDT's US strategy, where it specifically targets the sub-$750 PC market.
Last week, parent company IDT announced what CEO Len Pernham called 'disappointing' first-quarter results, turning in a net loss of $50 million, for the period to 28 June. Revenue was down 10 per cent to $134.5 million. The company blamed the results on the downturn in the semi-conductor industry and 'continued oversupply conditions'. As a result, it will cut 400 jobs, close its wafer fabrication plant in San Jose and consolidate its manufacturing and product divisions.
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