The move serves to reduce the price of Compaq's lower-end workstations by as much as 12 percent. Savings in the higher end would be proportionately less substantial.
Generally speaking, a low-end workstation based on the Windows NT/Pentium platform differs from a high-end PC only in that a workstation comes with sophisticated graphics capabilities and runs the "network-centric" Windows NT operating system rather than Windows 95. Workstations are often used for multimedia content creation, mechanical computer-assisted design (MCAD), and business and financial applications.
A 2D Compaq Professional Workstation 5100 with a 266-MHz Pentium II processor and a 19-inch monitor now starts at $3,893, down from $4,343. A 3D Professional Workstation 5100 with a 300-MHz Pentium II and a 21-inch monitor begins at $6,799, instead of $7,699, according to Compaq.
The monitor price cuts follow an aggressive round of workstation reductions in early October, when Compaq dropped prices by as much as 29 percent. Holding the No. 2 position in the Windows NT/Pentium-based workstation market, Compaq may be further positioning itself to gain market share in the year's final quarter, perhaps at the expense of direct seller Dell, said Dataquest analyst Peter ffoulkes.
Dell, which offers low-cost workstations packages that include a monitor, has been able stake out a position in the "value" segment. By reducing the price of a bundled monitor, Compaq undermines Dell's position because Compaq's network of value-added resellers (VARs) offers product support that Dell can't provide. According to ffoulkes, product support is important in the fledgling Windows NT/Pentium workstation market.
"What we're seeing is an emerging market and people positioning for early and substantial leadership," ffoulkes said. "I see this move as [aiming for] consolidation and mindshare."
ffoulkes suggested the promotion may alternately target workstation market leader Hewlett-Packard's low-cost XA line.
Compaq's promotional scheme is immediately effective and runs through January 31, 1998.