Communications vendor Hayes Microcomputer Products has slashed prices by up to 42 per cent across the board in an attempt to squeeze out its competitors.
The company has denied the cuts will affect margins for its dealers, saying it will absorb costs as far as possible.
Jeremy Butt, general manager for Europe, said: 'We're in this to try and take out the competition, not to hurt our channel. We won't be squeezing their margins in order to cut prices, they've got no reason to worry.'
Hayes is fighting an image which puts it in the high-price bracket in a commodity market. The firm claims that the image is a false one and that it has introduced the cuts not because its products are over priced, but as a 'bold gesture' designed to grab attention.
Clive Hudson, UK managing director of modem market leader US Robotics, said the move would have no effect on its pricing policy. USR, which has 47.9 per cent of the market according to Dataquest figures, would remain more competitively priced than Hayes, he claimed.
'Hayes has 5.8 per cent of the market,' he said. 'Its price move is a reaction to our dominance. I won't dismiss the challenge out of hand, but if it cuts prices it has to be able to deliver the product. To stand any chance of affecting us, it's going to need to take some big risks on manufacturing.'
Butt conceded that most competitors wouldn't react, as their prices were already low. 'Some of them won't be able to, because their margins are so tight,' he said. 'We will beat US Robotics on some products, they will beat us on others. I'm presuming they won't react.'
Hayes prices have fallen in most products across both business and consumer markets. The Accura 288 Message Modem, which offers voice, data and fax for the SoHo market is to fall from u249 excluding VAT to u199 including VAT.
The equivalent product for the corporate market, the Optima 288 Business Modem, will drop from u399 excluding VAT to u299 including VAT.
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