New desktop brands pressure PC pricing

Toshiba and Quantex's decision to set-up desktop PC operations in the UK could start a price war and force a number of smaller PC makers to sail close to the low-margin wind, as the UK PC market approaches saturation point.

Toshiba is not undercutting desktop PC rivals but relying on branding and its existing, successful channel of notebook suppliers to help it find a desktop footing. However, direct vendor Quantex is looking to compete strongly on price in the UK, as it targets rival direct suppliers Dell and Gateway.

"Any price war now is more likely to impact the manufacturers than down at our end," said Mike Boreham, services marketing manager of leading multi-national dealer Info Products. "I have no problem with increased choice, but as a company, we have to be aware of any new company coming into the market for fear of radical changes in pricing. But with a view to Quantex, it is not traditionally direct sellers we come up against."

Boreham added that he was "surprised" that Toshiba didn't enter the desktop market earlier and suggested that he felt the brand was strong enough to do well in the UK. He was less enthused by Quantex. "I'm not sure how long it will take to get established," he said, "Escom came in with a blare of trumpets but it didn't stick. Questions have to be asked whether or not certain models can transfer to the UK successfully."