Hard Disks - Soft Prices
ST. LOUIS — From South Korea to Singapore, Asia has electronic gadgets humming off assembly lines.
And they just got cheaper.
Sometime next year, consumers can expect lower prices on computers, small color televisions, and other gizmos.
But don't expect fire-sale pricing.
"You are not going to see the quantum changes that people may expect," warns John Murphy, publisher of the PC Street Price Index in Gibbsboro, N.J.
"These are probably going to be onetime drops," adds Todd Thibodeaux, senior economist at the Consumer Electronics Manufacturers Association in Arlington, Va. His conservative estimate: an average 5 to 10 percent decline in consumer electronics goods.
Some products mostly manufactured in Southeast Asia, such as boomboxes, portable radios, and 13- and 19-inch TVs, could see bigger declines, he adds (see chart).
Such price-cutting comes on top of an already falling price curve. Typically, electronic goods get about 3 percent cheaper each year; computer prices can fall that much in a month.
So computer buyers will have to look hard to see the impact of the currency crisis. Still, the effect will be broad, because Asian companies turn out finished products and components for US and Japanese companies.
So computer manufacturers will get a break on hard drives from Malaysia, Singapore, and Thailand, and on computer memory, another Southeast Asian product.
"You can probably figure you can save a few bucks on your hard-disk drive six months from now," says Jim Porter of Disk/Trend, a Mountain View, Calif., research firm.
What's impossible to tell is how much of the savings manufacturers will pass along to consumers.
A complicating factor: Many suppliers have long-term or dollar-denominated contracts with Southeast Asian suppliers that will not be affected by short-term currency fluctuations.