In the latest move in an ongoing campaign to spark its notebook sales, Hewlett-Packard announced price cuts of 7 to 28 percent on various OmniBook notebook lines.
One model in the high-end of HP's lineup received a hefty price cut. The ultrathin Omnibook Sojurn, which is less than an inch thick, had its price reduced 28 percent to $3,299. Prices to date had been well over $4,000.
The top-of-the-line 7100 with a 266-MHz Pentium II chip and 14.1-inch active-matrix LCD display received a more modest 7 percent reduction and is now priced at $4,499 down from about $4,900.
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In the heart of the lineup, HP cut prices on its OmniBook 4100, a thin-and-wide design, by 17 percent, with estimated street prices starting at $3,299 for a system with 233-MHz Pentium II and 13.3-inch active matrix display, while at the low end, prices on the Omnibook 2100 were reduced by six percent to $2,399 for a 233-MHz Pentium II and 12.1-inch active matrix display.
Overall, notebook sales have been slowing relative to their desktop counterparts. Annual growth in unit sales of desktops outpaced notebook growth in the second quarter, according to both International Data Corporation and Dataquest.
Price cuts are needed to keep demand up as more and more resellers report that the mainstay of the corporate notebook market is not for so-called "desktop replacement" systems with huge screen and latest processor, but more affordable systems.
In July, HP rolled out a program for resellers aimed at helping HP keep abreast of inventory levels, and subsequently, more responsive to changing market pricing conditions. Under its inventory-management scheme, resellers transfer electronic data to HP, providing the company with daily inventory volume and sales receipts. HP in turn gives resellers product discounts to five percent.
So far, the results of HP's efforts seem to be paying off. While third quarter results for the company's PC division show flat revenue growth as the unit was beset (like many other PC vendors) by pricing pressures, the notebook unit was able to show gains.