channel choke | KitGuru https://www.kitguru.net KitGuru.net - Tech News | Hardware News | Hardware Reviews | IOS | Mobile | Gaming | Graphics Cards Mon, 25 Mar 2013 17:52:34 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.kitguru.net/wp-content/uploads/2021/06/cropped-KITGURU-Light-Background-SQUARE2-32x32.png channel choke | KitGuru https://www.kitguru.net 32 32 nVidia slashes prices and takes fight to AMD https://www.kitguru.net/components/graphic-cards/jules/nvidia-slashes-prices-and-takes-fight-to-amd/ https://www.kitguru.net/components/graphic-cards/jules/nvidia-slashes-prices-and-takes-fight-to-amd/#comments Mon, 25 Mar 2013 17:52:34 +0000 http://www.kitguru.net/?p=129368 We love a bit of argy-bargy at KitGuru. There's nothing quite like a couple of multi-billion dollar corporations slugging it out, toe-to-toe, for market share. Right now, it looks like the winner is going to be you, the KitGuru reader. For our American cousins, argy-bargy is where everyone gets very hormonal – and that's when …

The post nVidia slashes prices and takes fight to AMD first appeared on KitGuru.]]>
We love a bit of argy-bargy at KitGuru. There's nothing quite like a couple of multi-billion dollar corporations slugging it out, toe-to-toe, for market share. Right now, it looks like the winner is going to be you, the KitGuru reader.

For our American cousins, argy-bargy is where everyone gets very hormonal – and that's when things get interesting. AMD stirred the pot with the release of the  7870 Tahiti LE, alongside the 7790 launch and appointment of former nVidia global VP for GPU sales, Roy Taylor.

Now, it seems, Fiona Faulkner [nVidia's queen of European sales – Ed] and her team are getting ready to wrestle in the mud.

You can read KitGuru's predictions about the ‘GTX 655 Ti' Vs 7790 match up over here.

Up and down the UK, resellers have been told that the up-coming launch of the ‘GTX655 Ti‘ will be preceded by a drop in price on standard/established nVidia stock.

Starting ‘very soon', you can now pick up the following deals from nVidia partners, with the promise of more to follow in other areas:-

  • £98 1GB GeForce GTX 650 Ti
  • £153 2GB GeForce GTX 660

Get a complete list of the leaked pricing over here.

Some of the new pricing looks great, but how much will the drop cost nVidia in terms of price protection for the channel? Every time we get a bargain, someone has to pay for it. We reckon Fiona has a big budget set aside to make nVidia's mid-range hot.

.

KitGuru says: Anyone looking for value for money just got a serious boost in the arm. With the 7850 cards as aggressive as they can be in light of a strong dollar – and the 7790 joining the action at just over the £100 mark, nVidia is confirming that it won't go quietly into the night and certainly not without a fight. With warm weather around the corner, the market will constrict, and that's when Roy and Fiona will find themselves locked in a deadly battle for market share.

Comment below, in the KitGuru forums or join over 50,000 KitGuru lovers over on Facebook.

The post nVidia slashes prices and takes fight to AMD first appeared on KitGuru.]]>
https://www.kitguru.net/components/graphic-cards/jules/nvidia-slashes-prices-and-takes-fight-to-amd/feed/ 1
Consignment stock – ticking time bomb for Acer/HP? https://www.kitguru.net/components/cpu/jules/consignment-stock-ticking-time-bomb-for-acerhp/ https://www.kitguru.net/components/cpu/jules/consignment-stock-ticking-time-bomb-for-acerhp/#comments Sat, 13 Aug 2011 13:00:32 +0000 http://www.kitguru.net/?p=55924 As the world comes to terms with the channel choke saga, additional far-reaching effects are also coming to light. The potential time bomb here concerns the way that larger stores do business. KitGuru heads to the shop floor to try and understand the cash flow battle between DSG and multi-nationals like Acer and HP. First …

The post Consignment stock – ticking time bomb for Acer/HP? first appeared on KitGuru.]]>
As the world comes to terms with the channel choke saga, additional far-reaching effects are also coming to light. The potential time bomb here concerns the way that larger stores do business. KitGuru heads to the shop floor to try and understand the cash flow battle between DSG and multi-nationals like Acer and HP.

First up, a little clarification. When we refer to HP and Acer, the buck does not stop with those two badges. These mountains of (largely) low-end PCs come with a number of names on the front.

Acer also includes Gateway and Packard Bell – so expect bargains everywhere on these 3 brands. Right now, we can see that even with the previous generation Core i5 Intel processors, prices have tumbled in many cases by around £200.

HP also includes Compaq – and the £200 off Compaq laptops you see on UK TV right now is a direct result of the channel choking on chips (remember that with these bargains, you will have to live with a CPU from a bygone era).

The underlying problem is that HP and Acer have been taking far too long to sell through on Intel processors. That results in dated stock, which the tech-savvy audience is not so keen to purchase.

If you're not sure about the age of the CPU, here is a comparison of the past and present logos.

Chips with the logo on the left arrived Summer 2009. On the right, 2011. The new ones are much, much better.

That brings us to consignment stock. What does this mean and why could it be so dangerous for HP and Acer?

For most stores, you need to buy in products in order to stack the shelves. However, the major retailers like DSG will work on consignment stock. Massive amounts of product are dropped into warehouses and stores, all of which still belongs to the manufacturer until it is purchased by the customer, i.e. you.

Once you buy that Acer or HP system, that unit goes onto the purchase order for that month. With a company like DSG, massive and with cash flow issues of its own, the payment terms could easily be 120 days.

With the most recent reports that half of HP and Acer's stock is now over 6 months old, you can see the problem – right?

HP PC is built, packed and shipped from China around last Christmas. The cost to Hewlett Packard was £350 and DSG optimistically puts it on sale at £599.

This poor HP PC arrives in PC World stores just as the worst drop in consumer desktop spending ever hits town. Comparing Q1 2010 with Q1 2011, research experts like IDC have reported a drop of almost 44% in the sale of certain Tower PCs. Not good news.

Imagine how jealous your mates will be when you tell them that you've landed an Acer Predator, complete with i7-930, for just £1,399 - if you have time on your hands, you could head to PC World and try to see how many of the old Intel badges you recognise!

So that PC lands in PC World Birmingham at the start of January, filled with last year's technology, and it begins to gather dust. Remember, DSG has NOT bought the PC if it is on consignment. It's just sitting there, ageing.

Going into Q2, stimulation is needed, so HP agrees to reduce the price. Remember, they still have not been paid and the PC was made 4 months ago.

It carries on sitting there from April and May, to June and July. It now becomes part of a ‘Back To School' discount programme and more money comes off the price.

As the leaves turn brown, conkers fall to the ground, the nights get shorter and everyone is feeling a little bit more wary of the world economy.  HP tries a last ditch effort and gives yet another discount to DSG.

Finally, the PC is reluctantly purchased with a £250 off sticker.

Being the smart retail animals they are, DSG also gets the customer to buy the ‘mobile kit', which includes high margin bag, memory stick and anti-virus.

The sale of this ancient HP desktop PC goes onto the sell-out report for August, which creates a September invoice from HP, which – guess what – DSG has no intention of paying for 120 days (HP has, after all, agreed to those terms in writing).

This might be an extreme example, but it gives you an idea of why you are seeing such huge bargains in the sale of low end systems right now.

HP ships a PC in December 2010, with a cost price of £350. By the time all of the discounts have been factored in, HP will almost certainly have sold this particular system at ‘below cost'. Not only that, the payment for the machine might not land in HP's bank account until January 2011.

Is there a real world consequence to this kind of trading pattern?  Not certain ourselves, we did a quick screen grab on Yahoo's Finance pages.

If you were a skier, then HP's share price graph may well represent the black run. Downhill, with plenty of bumps.

KitGuru says: While the value of a share might go up and down, we can tell you for nothing that old PCs on the shelf only go one direction. Local, specialist builders who blend the latest components – to an exact customer order – and then ship as soon as it has completed testing, will almost certainly enjoy a renaissance over the next 6 months. You really would not want to be at the bargain end of the PC league table right now.

Comment below or in the KitGuru forums.

The post Consignment stock – ticking time bomb for Acer/HP? first appeared on KitGuru.]]>
https://www.kitguru.net/components/cpu/jules/consignment-stock-ticking-time-bomb-for-acerhp/feed/ 3
Half of Acer and HP stock is now more than 6 months old https://www.kitguru.net/components/cpu/jules/half-of-acer-and-hp-stock-is-now-more-than-6-months-old/ https://www.kitguru.net/components/cpu/jules/half-of-acer-and-hp-stock-is-now-more-than-6-months-old/#comments Fri, 12 Aug 2011 13:47:38 +0000 http://www.kitguru.net/?p=55764 In a morning of shocking revelations, we think the cherry has finally been placed on the cake. Spurred on by KitGuru's earlier reports, we're now hearing that the level of backlog in the channel is far worse than we expected. This is serious stuff, with serious implications. Intel recommends that you buy Second Generation Core …

The post Half of Acer and HP stock is now more than 6 months old first appeared on KitGuru.]]>
In a morning of shocking revelations, we think the cherry has finally been placed on the cake. Spurred on by KitGuru's earlier reports, we're now hearing that the level of backlog in the channel is far worse than we expected. This is serious stuff, with serious implications.

Intel recommends that you buy Second Generation Core processors. No ifs or buts, these are the smartest Intel chips available and the smartest Intel customers will buy them. The experience promises to be smart, seamless and stunning. These new chips give you a Turbo Boost when needed, they are smart multi-taskers and you'd be daft to buy anything less. Certainly anything much older. So what's going on?

Which is more appealing? Brand new, Intel Core PCs or the stuff Acer/HP has had in the warehouse for god knows how long?

.

Stories out today have highlighted the fact that Intel has finally owned up that it has known for some time that the channel is choking and that golden child HP is stuffed full of chips.

On the basis that technology is like milk that has been left out of the fridge, the backlog of kit that the world's biggest PC manufacturers now have in their warehouses must look like Stilton and smell like Gorgonzola.

Perfect inventory control does not exist – let's all start off by admitting that. Even in a house with a handful of people, you can run out of milk/bread/eggs/rum.

But when you run out of milk, you fix it with a trip to the shops. Similarly, if you find that you have too many eggs near the sell by date, you can always whisk up an omelette or cake. So how does it with with the big guys?

While the maths surrounding the supply channel have moved on mighty leaps since the start of the Second World War. That was a time when American army boffins suddenly realised that they needed numbers to describe the supply issues that go along with fighting a war on the other side of the planet [Wonder if that will come in handy again any time soon? – Ed].

In an ideal world, a company like HP or Acer would be holding 4-6 weeks inventory. That way, as new deals come along each quarter, they have plenty of time to move from one line up to another – while maintaining steady sales on core products (no pun intended!).

Once your inventory moves to 3 months, you are exposed to a new set of problems. Too much stock in your own warehouses, can prevent you from placing new orders when the deals are being pushed by suppliers like Intel.

Double that to 6 months and the world will suddenly become a very uncomfortable place.

Not only do you, as a PC manufacturer, end up with loads of money tied into old stock – that stock is also rapidly depreciating. Every machine you have on your shelves with an X58 mainboard inside is like a ticking time bomb. As soon as the X79 comes along, your stock will experience a considerable drop in value – hammering hard on the bottom line. Your worst enemy becomes the smaller system builder that you have been crushing, on a regular basis, for 10 years or more. Why? Because the smaller vendors don't use economies of scale the same way HP and Acer do, they do not have as much stock. So they sell it through quicker – opening the way for new product line-ups. Even someone as large as Dell will be smiling a little – shirley?

Half of HP and Acer's stock being more than 6 months old, means that it uses the ‘woefully old pre-Second Generation Core technology'. The new i3, i5 and i7 parts are so much better than their predecessors, that the old chips cannot hope to win in a straight fight. In KitGuru testing, the head to head on clock shows that Sandy Bridge can deliver 20% better results. Once you bring overclocking into it, then the difference is vast.

Expect a huge and bloody price war any day now.  If you're a non-combatant, we'd suggest that you follow Ian Gillan's advice: “You better close your eyes, you better bow your head – and wait for the Rick O'Shea”.

Old and smelly is fine for cheese, but not so good for performance PCs. Acer and HP stock managers take note.

KitGuru says: From the low end Core i3 series through to the Core i7 2600k, Intel's current generation of CPUs is hugely better than anything the company has produced before. Buying a system with one of the older chips is a mistake. If your stock is six month's old, then it is NOT second generation Core product. If they have been cleverer with inventory management, then Dell and Samsung must be licking their collective lips and looking at HP and Acer's market share figures. It has to be said that this is one of those occasions when AMD being so much smaller/slower to produce, has played in its favour. It's unlikely that more than 10% of the inventory clogging the world's shelves will be from AMD.

Comment below or in the KitGuru forums.

The post Half of Acer and HP stock is now more than 6 months old first appeared on KitGuru.]]>
https://www.kitguru.net/components/cpu/jules/half-of-acer-and-hp-stock-is-now-more-than-6-months-old/feed/ 6