Computer prices have been falling steadily, and the major PCcompanies are seeing lower revenue and profits. So far, no one is backing down. A few weaker players will fall out. But there's some substantial companies in for the long haul. Price wars are nothing new.
Industries consolidate as they mature.
Often, as with the airline, automobile and telephone businesses, a price war helps escalate the process. Whenever a new technology is introduced, it brings with it a large number of competitors. Almost always, as the technology grows in popularity, a shakeout occurs, leaving a smaller number of players battling over a bigger market. Four's a crowd Another shakeout usually follows, leaving a Big Three and a few second-tier companies struggling to survive or to find a business model that sets them apart. And then there will be the niche players going after the smaller, well-defined market segments that really need something special.