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AST could be first of many to leave retail PC route

AST's exit from consumer sales could be the first domino in a line, said a spokesman for rival PC vendor Gateway 2000 today.

"It's very hard to make money out of retail," said John Shepheard, UK general manager. "You need to give a major retailer 20-25 per cent or more, and it's tough to put some margin on top of that and stay competitive. Our gross margin is only 18 per cent as it is. In retail, computers are like cheese; you leave them for a few weeks and they start to smell. It's going to get even tougher because there were very few revolutionary products introduced last year. With two major processor releases from Intel already this year and other vendors making things interesting, that will change."

AST has built up a powerful retail channel including Byte, Comet, Tempo, Allders, Granada, Powerhouse, Staples, Scottish Power and Hughes among partners.