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Recent Price Drops in AMD Processors, Blu-ray Players May Auger Retail Weakness
Electronics | Sep 17, 08
When cutting-edge processor retail prices fall below wholesale, and state of the art media player prices drop like a rock, you have to question the health of the consumer electronics market.
In the first week of September we saw a decline of 7.6% in PriceSCAN’s AMD Quadcore Index, and a 6.7% decline in the price of our AMD Dual Core Index, indicating retail pricing less than or equal to wholesale prices. Further, PriceSCAN’s Blu-ray Index fell 8% in the first half of September, about two-thirds of its decline over the entirety of the third quarter to date.
In the context of a slowing economy, retail discounts to wholesale, like those we’re seeing in AMD processors, may signal excess inventory and/or weak demand. Further, the sharp drop in Sony Blu-ray pricing, coming as it does following recent victory over Toshiba’s HD-DVD standard, could suggest not only effective competition i.e. Netflix’s Roku or "upconvert" DVD players (see for example "Could A Poor Man’s "High-Def" Alternative (With Region-Free Playback) Be A Blu-ray Killer?"), but also softening demand for high-end consumer electronics.
Coming as all this does in the wake of a weak back-to-school period, none of this is particularly reassuring as we approach the holiday shopping season. The silver lining here comes in the form of bargains for consumers and perhaps less inflationary pressure, giving the Fed room to maneuver. Of course, one needs to have money to spend in order to take advantage of those discounts, and economic weakness is high prices to pay for, well, lower prices. Then again, with all the swell news coming out of Wall Street lately, who isn’t looking forward to the coming months with a renewed sense of lighthearted optimism…
Posted by jeffrey.trester at 1:58 AM | Comments (0) | TrackBack
