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Study: PC prices rocking to the bottom

New data from NPD Techworld says that although sales of desktops and notebooks held steady in February, prices dipped to all-time lows.

PC sales held up at retail during February, but PC prices hit all-time lows during the month, according to new data from NPD Techworld.

While desktop unit sales declined by 9 percent and notebook unit sales increased by 23 percent, the average PC prices were significantly lower than in past months.

The average price for a desktop PC sold at retail in the United States declined to $717 in February. Meanwhile, the average price of a notebook slipped to $1,311, the company said Friday.

Prices had been hovering closer to the $800 mark for a desktop and $1,500 for a notebook over the past six months, NPD analyst Steve Baker said.

The declines can be attributed to consumers who likely felt that less expensive PCs offered enough performance for their needs, he said. These days "customers are looking for good enough value, something they perceive as a good value at a low price point."

There was more sales activity for notebooks in particular at the low-end of the price range than had been typical for the past months.

Part of the reason is price. Consumers can now easily find a notebook with a 15-inch screen, 256MB of RAM, a 40GB hard drive and a CD burner, if not a combination CD burner/DVD drive for under $1,000, including rebates and other special offers from retailers.

A year ago, it would have been a tougher proposition to find a computer with a 15-inch screen and a CD burner for less than $1,000.

But, highlighting the overall trend toward lower prices, sales of midrange desktops that cost between $800 and $1,500 collapsed during February. Their unit sales volumes declined by 47 percent year over year, Baker said.

Meanwhile, unit sales of sub-$800 desktops grew by 17 percent, allowing the category to capture a whopping 72.9 percent of total desktop unit sales in February, up from 56.7 percent in the same month last year, he said.

There was some activity in the very high-end of the desktop market during February. Unit sales of desktops priced at $1,500 or more actually ticked up by almost 11 percent year over year, Baker said.

But, for the most part, PCs with bells and whistles aren't selling at a torrid pace that would suggest people were upgrading their PCs just to get them, he said. Instead, consumers appear to be waiting for features like DVD burners to come down in price enough to become available in lower priced machines. Desktops from Hewlett-Packard and Sony with built in DVD burners have hit the $900 mark only recently.

Buyers have also shifted toward flat-panel displays over the more traditional CRTs. Some people undoubtedly put larger portions of their computer budget toward a flat-panel display in February and therefore spent less on a new desktop, Baker said. (Flat panels still cost somewhat more than CRTs. A 15-inch flat panel, for example, costs around $300, as compared with $200 to $250 for a 17-inch CRT.)

NPD's average price for desktops does not include monitors, except where the displays are paired with a PC in a special promotional bundle or are built-in, as with Apple Computer's iMac.