Amstrad Plc has – for the time being at least – shelved its plans to sell the forthcoming GEC Marconi Ltd-manufactured analogue videophone, because it feels unable to match the price of the British Telecommunications Plc-badged version. It had intended to buy in the guts from GEC Marconi, and produce its own model based on these, but speaking at the extraordinary shareholders meeting just before Christmas, Alan Sugar said that the project had been shelved because it could not get the price down far enough. Since the company’s strategy has always been to try and undercut the competition on price, this presumably means that the company could not meet or better the UKP400 price tag that BT says it will sell the products for. Quite how British Telecom is able to get the price down so far is unclear, although it has a strong advantage over Amstrad in having its own chain of retail outlets through which to market them. Similarly, it has a vested interest in promoting take-up of the technology, as it will generate increased business across its telephone lines, so it would be in its interests to cut its margins on the videophone’s list price in the hope of recouping some of this from increased network traffic. At the shareholders meeting, Sugar also expressed reservations about the image quality that the videophone can produce. While previous problems with the technology have now been ironed out, Amstrad is apparently concerned that the public is expecting television-quality pictures, which the Marconi product is incapable of producing. lMCI International has firmly denied a comment by Alan Sugar that it, too, is abandoning plans to sell the Marconi videophone. Indeed, last week there was a demonstration, in conjunction with Hong Kong Telecommunications Ltd, of two of the machines working between the US and Hong Kong. While Hong Kong Telecom has said that mass deliveries have had to be delayed for a couple of weeks, it is now expecting them to reach the shops by the end of the month. Perhaps to try and compensate for the delay, it has also said there will be a special introductory price equivalent to $675.
