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IBM revamps workstations

Big Blue reduces prices by 22 percent on its line of Windows NT-based workstations and announces it will add Intel's 333-MHz Pentium II chip.

    IBM (IBM) reduced prices on its line of Windows NT-based workstations and announced it will incorporate Intel's newest and fastest Pentium II chip when it becomes available.

    IBM continued its thrust into the first ranks of the NT workstation arena, announcing its second round of price cuts since the IntelliStation M series first incorporated Pentium II chips in October. The company cut prices by 33 percent in November in a bid to be more competitive with NT leaders Compaq and Hewlett-Packard.

    The "Deschutes" Pentium II chips, a new generation of Intel's top-of-the-line processor manufactured under the 0.25 micron process, will be announced on Monday. The unveiling will include a 333-MHz version, topping the current 300-MHz chip.

    IBM belatedly entered the market for workstations based on the Microsoft's Windows NT operating system last March. Workstations made by Sun Microsystems and HP traditionally ran on the Unix operating system, but the systems based on NT have proven increasingly popular because of their lower cost.

    The Unix workstation segment remains secure at its high end, but overall workstation growth has come in the low-cost NT sector. For the first half of 1997, growth in the Unix segment held pace with year-ago figures, but NT growth had already exceeded the previous year.

    IBM attributed today's cuts to cost savings owing to "channel assembly," the practice of shipping unfinished systems and componentry to resellers, for configuration and final assembly according to customer specification. In contrast to factory assembly, the practice lowers unwanted inventory and speeds final delivery.

    The Intellistation M series starts at $2,850 without monitor.