PC seen getting a price chop this holiday season

NEW YORK (CNNMoney.com) -- Computer prices are expected to tumble through the holiday season as PC makers try to clear out merchandise ahead of the launch of Microsoft's new operating system Vista, according to a report published Thursday.

Citing estimates from the research firm Current Analysis, the Wall Street Journal reported that 70 percent of notebook PCs sold this holiday season will be priced at less than $1,000. In 2004, just 38 percent of notebook PCs were priced at less than $1,000, according to the paper.

"It's going to be a blowout sale," Samir Bhavnani, research director at Current Analysis, told the Journal.

The price chop, expected to come from both manufacturers such as Sony (Charts) and retailers like Circuit City Stores Inc. (Charts), was prompted by Microsoft's (Charts) decision to delay the release of its new operating system Vista to January, the paper reported.

It is expected that few consumers will want to purchase computers that run on Windows XP following the launch of Vista, the paper reported, even though Microsoft is launching a coupon program for computer buyers to upgrade to Vista when it premieres next year.

PC makers like Hewlett-Packard (Charts) and Dell Inc. (Charts), had been hoping that the launch of Vista would drive sales during the holiday season, after U.S. PC shipments fell 2 percent during the third-quarter, according to the research firm Gartner, the paper reported.

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