The price of quad-speed CD-Rom drives dropped to record levels last week while the channel now faces the same hectic dumping on six-speed units.
Both manufacturers and distributors claim that a combination of factors, including grey market imports, are distorting the market.
A quick phone round of distributors last week showed that the current trade price for quad drives varied between #35 and #40. Prices are expected to fall to #30 soon.
James Wickes, Ideal Hardware MD, warned: 'The same process is starting for six-speed drives. Every man and his dog was expected to buy a PC last Christmas and that was totally overblown.
'The German market has gone down the toilet. There's grey-market machines to compete with. There won't be a solution until the glut ends.' Another source at a medium-sized distributor said six-speed drives only had a shelf life of three months. 'It's a way of preparing the industry for eight speed,' he said. 'There are a lot of people stuck with a lot of stock.' Manufacturers will not offer price protection on CD drives. 'They're just advising us to buy less stock.' Kieran Sumner, Goldstar high media business manager, said: 'Even before the six-speed was released, other manufacturers had rubbished the price. There are grey machines entering the market from Europe, the Far East, the US and Canada,' he said. That sometimes meant he was competing with grey Goldstar drives.
Since the beginning of the year, Goldstar had advised its UK distributors to buy limited quantities only.
Ideal thinks that the market may begin to stabilise in June when eight-speed drives come on stream. These drives will be used for around six months.
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