Far reaching consequences
If our sources are correct, what remains unanswered at this time is why Avnet would make such a move, which it must have realised would send shockwaves through the channel.
It's difficult to see how the competitive challenge thrown down by a unilateral price cut of this kind could fail to provoke retaliatory price moves for all AMD Radeon HD 4890s and initiate a domino effect of price cuts on all cards priced below it - both AMD and NVIDIA.
The consequences of this move could be very far reaching indeed. Major customers of AMD, NVIDIA and their AIBs will be expecting price protection on the stock they currently hold, and the bill won't be small.
Smaller channel players, however, are unlikely to even qualify for that, and will be stuck with a bunch of stock they now have to sell at below cost. The only winners from this will be consumers, who are now able to get their hands on some serious bargains.
We would like to hear the views of any channel players that expect to be affected by this move. Is your stock price protected and if not, what are the implications for your business? Let us know in the HEXUS.community discussion forums.
UPDATE - 13:20, 21 May 2009:
We've been contacted by various players in this story, each claiming they were the first to buy these cards at the reduced price.
What's important, however is that this whole saga illustrated how distributors can be put under pressure by their customers, with far-reaching consequences.
The sole beneficiaries remain, at least in the short term, the consumers.
