UK PC prices too high, says Cyrix

UK computer buyers do get a raw deal compared to their Continental neighbours but "there's no conspiracy", says chip maker Cyrix.
Written by Chiyo Robertson, Contributor

Cyrix was responding to the escalating debacle about UK PC pricing. The debate about Brits paying more for computers than their continental neighbours hotted up this week after Intel boss Craig Barrett accused electrical retail giant Dixons Group of charging "ridiculous margins" -- a claim that prompted an angry response from the store's chief.

"There are big differences (in PC prices) between the territories but there's no great Dixons conspiracy," said Cyrix's European Applications Manager Graham Jackson.

Jackson admitted that UK shoppers were worse off compared to German and French consumers, but he insisted that PC prices were falling. Pan-European discrepancies in prices had more to do with market forces than efforts by Dixons to monopolise the UK market, said Jackson. "PC prices are better in Germany and France where you can pick up discounted machines in places such as hypermarkets. Germany has a particularly aggressive market. It's like buying a car. They're more expensive in the UK than on the continent. Market forces do come into play," said Jackson.

Cyrix is rapidly encroaching the space once solely occupied by rival chip giant Intel. Cyrix recently signed a deal to supply Dixons with its Cyrix M-II processors for the retailer new £599 Patriot models. Some observers believe Barrett's attack on Dixons is a case of sour grapes. "Why get involved in discussions about margins. We are selling cost-aggressive systems. To say that Dixons is over pricing is not right," added Jackson.

Nevertheless, Dixons faces mounting criticism about its monopoly position in the high street. The Consumers Association has now waded in to the debate and wants competition bodies to get the Group to explain its pricing strategy. Analysts believe that unsavvy, first-time buyers are likely to purchase from a big brand rather than shop around for the best deal. But Jackson rubbished the notion that UK buyers were more technophobic than their European neighbours. "Cultural differences may play a part in this, but to say that one region is more or less technologically oriented? No."

Jackson wryly avoided discussing specifics of Cyrix' deal with Dixons, claiming "margins are drastically different" for each retail division and there were "many factors involved in marketing chips" to customers. He did he guestimate that for the Dixon's Patriot PC, the chip accounted for around 10 percent of the total PC price tag.

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