RAM Prices Dip on Pentium 4 Entry

The ever fluctuating RAM (random access memory) market, often likened to the stock markets, has been witnessing a steep downward slide in terms of prices, with the entry of Pentium IV.

SD RAM prices have fallen by as much as 30 per cent here in the past few weeks. A branded 64 MB RAM, which was selling around Rs 4,500 just six months ago, was being sold at Rs 750 three weeks ago, though regaining to Rs 1,200 this week.

A 128 MB SD RAM sold at a high of Rs 10,000 three months ago, is being sold at Rs 2,400 to 3,100, depending on whether it's an original branded piece or an imitation, say dealers in Park Lane, considered the hardware wholesale hub in Andhra Pradesh.

The unbranded SD RAMs, mostly smuggled in from Taiwan, Singapore and China, are being sold at a lesser price -- at Rs 1,250 for a 64 MB, and at Rs 2,250 for 128 MB RAM.

The massive fall is being attributed to the introduction of PIV, which requires a technically superior memory -- the RD RAM. "Intel dealers and top PC vendors are pushing Pentium IV, and they can't do it, if the percentage cost of the memory on the whole system is not lowered. If Pentium IV has to sell, prices of memory need to come down. So, they are driving down RAM prices," T Srinivasan, secretary of Twin Cities Dealers Association, told ET.

Also, unlike last year, the Jan-Feb-March sales of PCs this year has been lull. Moreover, in the last six months, there has been a shift from 100 MHZ to 133 MHZ dims, so there has been a liquidation in RAM prices to push up sales, he says.

Agrees Raminder Singh of Priya Ltd, which is into trading of computer parts. "More and more vendors abroad, especially in China and Singapore, are trying to manufacture superior RAMs -- the RD RAMs -- that can support Pentium IV, thanks to the huge demand for superior technology. Thus, the lower prices of SD RAMs," he says.

Predictably, RAM sales have been catching on since the last two weeks of March. An estimated 12,000 to 15,000 RAM pieces are sold a day in Hyderabad alone, he says. More than 90 per cent of the RAMs sold are either imitiations or non-branded, admits a leading dealer.

However, the cheaper prices are also because of a massive dumping of cheap RAMs, mother boards and hard disks from China, says Singh.

"The prices are lower than what is quoted by PC companies. Dealers, who purchase the RAMs at auctions in Taiwan, Singapore and China, either smuggle them in or ship them legally. Either ways, it works out cheaper," he says.

Moreover, the dealers apparently also operate in a cartel, driving the prices up and down creating artificial supply and demand situations.

Admitting the existence of the grey market, Srinivasan says more and more customers are preferring the open market, whether organised or grey, as the prices are lower by as much as 50 to 70 per cent and the delivery is faster thanks to availability, he says.

The only solution is that principles like HP and Compaq price their RAMS and add-on devices realistically, he adds.