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Best Buy to sell its own PCs

In an attempt to compete against big names such as Compaq and HP, the electronics retailer is launching its own PC brand--but it may be in for a challenge.

Electronics retailer Best Buy has begun selling its own line of PCs.

A company representative confirmed Wednesday that Best Buy has launched a private-label PC line, which started appearing in stores this week. The representative had no other information immediately available.

But two models of Best Buy's new VPR Matrix line were on the shelves of a Massachusetts location Wednesday afternoon.

The Matrix 1600, priced at $899, offers a 1.6GHz Intel Pentium 4 processor with 512MB of double-data rate SDRAM, an 80GB hard drive, a DVD-ROM drive and a CD-rewritable drive. The Matrix 1800 for $1,099 adds a 1.8GHz Pentium 4 and a 100GB hard drive.

Best Buy will also sell a third model, the Matrix 2000, for $1,299. It will add a 2GHz Pentium 4 and a 120GB hard drive.

By comparison, Compaq Computer's Web site sells a Presario 5430US desktop with a 1.8GHz Pentium 4, 512MB of DDR SDRAM, an 80GB hard drive, a DVD-ROM drive and a CD-RW drive for $1,199.

The Matrix line marks Best Buy's first foray into selling its own brand of PCs.

A Merrill Lynch report released Wednesday states that the Matrix line is designed to compete against computers from such big names as Compaq and Hewlett-Packard--which are already sold in Best Buy stores.

The Matrix PCs, which will be manufactured by a Taiwan company, are an attempt to boost Best Buy's profit margin and its own brand name, the report said.

Best Buy's move follows a better-than-expected holiday season in which PC sales industrywide were up slightly year over year, thanks to strong notebook sales. High-end PCs have also been selling well lately.

Private-label merchandise is popular among retailers in general--from grocery stores to furniture dealers. However, electronics sellers such as Best Buy have typically been slower to slap their own name on a PC or any other computing device. When they have done so, it's been with limited success.

Best Buy rival CompUSA has made the highest-profile attempt at creating its own PC brand by offering CompUSA-branded PCs over the past several years, analysts say.

"Typically, private-label PCs have not done very well," said Steve Baker, an analyst with NPD Intelect. "CompUSA is the best example, and they just...got out of that again for the second or third time."