Underlining the precipitous decline of the US personal computer market for premium vendors, IBM Corp was forced to cut PS/2 prices for the second time in a month. The floppy Model 30 was cut 12% to $1,800; the 40Mb disk version was cut 6% to $2,345. The Model 55 laptop was cut 17% to $2,400; the 30Mb Model 55 was cut 8.3% to $2,745. The Model 80 with 80Mb disk fell 16% to $4,600 as did the 160Mb version, to $5,100. The Model 80 A31 was cut 24% to $11,500. It is believed that the cuts had been planned for next month when replacements for some of the reduced models are to be introduced, but that the state of the market forced IBM to bring the cuts forward. Street prices will be substantially lower than IBM list, and the fact that the company is having to compete on price, it appears that the personal computer market has now become the conclusively commodity market – at which point, chairman John Akers said a couple of years ago, IBM would likely get out of the market. If IBM were to decide that margins were too thin for the business to be viable in IBM terms, it would most likely spin the business off in the same way as it did with its Lexmark International Inc keyboard and printer arm.
