Industry scowls at AST price cut

Hardware manufacturer AST insisted last week it would maintain channel margins amid allegations from other manufacturers that it was dumping stock.

The news came as AST set its hat firmly against direct players Dell and Gateway by launching products which will continue to undercut prices even after Intel cuts its chip prices on May 1.

A Dell representative confirmed it will make a mass of announcements on April 29, including the drastic slashing of its notebook prices, when it will launch new portable and desktop models. Meanwhile HP cut prices on its Omnigo notebook.

Commenting on AST's price cuts a Dell representative said: 'Something very similar is going to happen from Dell. There are a whole raft of embargoed announcements coming along.'

That prompted animosity from Julian Neath, MD at ALR UK. 'I'm cutting all my desktop product prices on May 1 by 25 per cent, but we can't get to the prices on the Bravo range because we don't have enough stock to dump,' he said.

But Graham Hopper, MD of AST UK, although admitting its old products were being heavily discounted, denied this would hurt the channel. 'They are aggressively priced. I wouldn't use the word dumping, but we are clearing the old stuff out to make sure the decks are clean.'

Hopper maintained that would not hurt corporate resellers. 'There's a lot of old product in the channel, but the focus is to get it out of the channel,' he said. That was directed primarily against companies such as Dell and Gateway. 'The strategy is to make sure we are quicker to market than Dell. Traditionally, Dell has always been first to market with new machines,' he said.

'This is positive for the channel. The big resellers look at Gateway and Dell as their competitors rather than each other,' Hopper said Gateway responded swiftly by introducing price cuts of u280 on all its desktop models.