Consumers pinching chipmakers

SEPT. 16–SAN JOSE, CA–Despite chip makers’ spending on TV, radio and print ads that feature the latest benchmark tests, space aliens and even dancing cleanroom workers in bunnysuits, consumers are paying little attention to processors in their searches for perfect PC.

When Jeanette Bosio was shopping for a computer, wasn’t looking for the fastest processor, richest sound or coolest graphics. She wanted the best price.

The $1,100 Compaq Presario 700 notebook she bought this year is good enough for her needs. It plays music, shows movies and can connect to the Internet, a requirement of her two school-age daughters.

“If it were for my business, I would have spent more,” says Bosio, the construction company owner told The Associated Press. “For my personal use, I don’t need that much. I’m a single mom, so money was an issue there.”

Bosio isn’t alone, for the ranks of value-minded shoppers appear to be swelling, at least according to the latest financial data reported by the makers of microprocessors, the brains of PCs.

Both Intel Corp. and Advanced Micro Devices Inc. reported selling far fewer high-end processors in the second quarter than they had hoped for. Whether this is an anomaly or the start of something bigger is the subject of considerable debate.

An obvious explanation is the economic downturn and tighter budgets for both consumers and businesses.
Computer makers may have misjudged demand overall.

Another possibility is that consumers see no real need to buy more performance when slower, less expensive machines handle most jobs well enough.

“The folks who are using these machines for office productivity, e-mail, surfing the Web over a dial-up modem, decided in many cases that the lower speed machines are more than adequate for their needs,” says Nathan Brookwood, an analyst at the research firm Insight 64.


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