NEW YORK--On the eve of the PC Expo trade show here, Compaq Computer and Hewlett-Packard are offering new Pentium II-based business systems as the industry sorts through recent mergers and ongoing inventory control problems.
An oversupply of PC systems, combined with slower-than-expected sales, shorter product life cycles, and dropping component prices have led to lower-priced technology in nearly all product segments in the past months. This trend will likely continue, analysts have said.
Compaq concentrated on notebooks today, releasing new models and cutting prices on older ones.
The PC giant updated its Armada notebook lineup with the new Armada 1700 series, a new all-in-one notebook line for the manufacturer. The top model in the 1700 series includes a 266-MHz Pentium II, a 13.3-inch color TFT screen, 32MB of SDRAM, and a 4GB hard drive for $3,349.
The new entry-level Armada 1700 also includes the Pentium II processor, as well as up to a 13.3-inch active-matrix display. The CD-ROM, floppy drive, and 4GB hard drive can all be used in the system at the same time with the "modular bay" design, a feature not seen in the Armada 1500s. Prices start at $3,349 for a model with a 266-MHz Pentium II; a notebook equipped with a 233-MHz Pentium II and a 12.1-inch display is priced at $2,869.
Compaq's new Armada 7800 series notebook will ship with an 8GB hard disk drive, 64MB of memory, and CD-ROM at a starting price of $5,359.
The company also cut prices on eight other notebooks in the Armada line and introduced the Armada 1505DM, a portable with 200-MHz Pentium MMX processor that will sell for $1,599. Among the price reductions, the Armada 1590 was priced at $2,499 and is now priced at $1,999, a reduction of 20 percent. An Armada 5233 with active-matrix display was priced at $3,199 and is now priced at $2,749, a reduction of 14.1 percent.
While Compaq has had troubles managing desktop PC and server inventory, its notebook lineup temporarily has garnered the lead in the U.S. market, according to market research firm International Data Corporation.
Meanwhile, Hewlett-Packard rolled out the NetServer LC 3, which comes with 350- and 400-MHz Pentium II processors and 100-MHz system bus speeds. The systems can support up to 63.7GB of internal storage and up to 1GB memory, and will come with features for improving system reliability and maintenance. No pricing was available.
In addition, the company also introduced a Brio business PC with the new 300-MHz Celeron processor. The system is expected to sell for $1,190 and includes 32MB of memory, a 4GB disk drive, and 24X CD-ROM.
Analysts say the market right now is facing an oversupply of PC servers. Excess supply already is hurting the profitability of vendors such as IBM and Compaq, as companies slash prices and clear out inventory.