Leading PC makers cut prices

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Top PC makers cut prices

Compaq clears out old models; Dell passes on lower component costs

February 1, 2000: 2:44 p.m. ET

NEW YORK (CNNfn) - Two of the world's largest computer makers on Tuesday announced that they have cut prices on their commercial desktop PCs.
    Compaq, the No. 1 PC maker, said it cut prices up to 13 percent on most of its Deskpro series commercial PCs. The price cuts are being made to clear the way for nine new Deskpro models.
    Prices on the older models begin at $849 for the Deskpro EP series models with 466 MHz Intel Celeron processors, Microsoft's Windows 95 operating system and a 15-inch monitor, Compaq said.
    Deskpro models equipped with Intel Pentium III processors also have been reduced by as much as 13 percent, the company said.
    When Compaq (CPQ: Research, Estimates) reported its fourth-quarter financial results last month, executives said that the commercial PC unit posted a loss of $79 million on sales that slid 19 percent from the year earlier.
    The Houston-based company said prices of the new line of Deskpro PCs - which have been configured in a way to ease their installation into corporate network infrastructures - will start at $989. The new models are scheduled for rollout later this month.
    Meanwhile, across the state in Round Rock, Tex., Dell Computer said it is cutting prices on some of its Precision-brand WorkStations by as much as 17 percent.
    Dell (DELL: Research, Estimates), the world's second largest supplier of PCs, said it was cutting prices because the cost of the components it uses to make them have also dropped.
    Effective Monday, a Dell Precision WorkStation 210 with a Pentium III processor running at 650 million cycles per second will sell for $1,740, a 17.1 percent reduction, the company said. Dell also said it cut prices on the mid-range models in its Precision WorkStation 410 line by up to 15.5 percent.
    Last week, Dell warned investors that its fourth-quarter sales and earnings would fall short Wall Street's expectations, blaming a shortage of key components and a slowdown in corporate spending that executives said they expect will continue into February.