Prices of high-end personal computers are likely to drop by 10-15 per cent, following the 30 per cent reduction in prices of some of Intel's Pentium 4 microprocessors.

PC companies are working out the extent to which they can cut prices, as well as the schedule for the reduction.

Intel, the biggest maker of semiconductors, on Monday reduced prices of some of its fastest Pentium 4 desktop processors by as much as 30 per cent. The 2.8 GHz Pentium 4 is now priced at $262 after a 30 per cent cut, and the 2.66 GHz and 2.6 GHz versions at $193 after a drop of 20 per cent.

This means a 2.8 GHz Pentium 4-based PC, priced at about Rs 60,000, will be cheaper by around Rs 6,000. The 2.66 GHz- and 2.6 GHz-based PCs will cost around Rs 38,000, down from Rs 45,000 and Rs 42,000, respectively.

A drop in prices of microprocessors is usually followed by a reduction in PC prices, with the former representing around 35 per cent of the cost of the latter.

"The price cut in processors will affect prices of high-end PCs, and we will pass on the cuts to consumers. However, the reductions will not apply to mainstream PCs which normally use 1.9 GHz microprocessors," said P Krishnakumar, country manager for consumer computers at Hewlett Packard, India.

Market sources say consumers will have to wait for some time for prices to go down because most firms have inventories of processors. "Normally, companies have inventories, and price cuts are not applicable immediately," an industry official pointed out.

"The price cut is for high-end computers, and is not applicable to basic and domestic users," Manish Aggarwal, marketing director at Vintron, a Delhi-based PC maker, said.

HCL Infosystems also said the price cut would only help high-end PCs. "Whenever there is a reduction in prices, we pass it on to our customers," a company spokesperson said.

The grey market, with its small inventory, is likely to be the first to reduce prices. Most dealers said prices would go down in a day or two. However, they constitute a small chunk of the market for high-end computers.