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Compaq cuts prices across board

Prices are sliced on everything from business desktop PCs to notebook PCs in a move that may spark cuts from rivals.

Compaq (CPQ) announced wide-ranging price cuts today on everything from business desktop PCs to notebook PCs, and rolled out new server computers.

The reduced prices may ignite comparable cuts from other PC makers. Compaq cut prices on its Deskpro PCs up to 23 percent and trimmed prices on certain notebooks by up to 13 percent. Compaq cut prices on personal workstations by up to 16 percent, and prices on their "PC companion" line of Windows CE handheld devices dropped by up to 29 percent.

"The price cuts will probably trigger cuts by other companies, but most of it is tied to price cuts by Intel on the processor [not Compaq's own pricing strategy]," according to Scott Miller, an analyst with market research firm Dataquest.

Compaq says the aggressive price cuts are an attempt to further bolster market share.

A sampling of Compaq price cuts 
NotebooksOld priceNew price
LTE 5300 $3,899$3,399
LTE 5380$4,199$3,699
LTE 5400$4,399$3,899
Armada 4131T $3,399$2,999
PC Companion
Old priceNew price
C120 $499$399

Compaq cut prices on the entry-level Deskpro 2000 family by up to 18 percent. A Deskpro 2000 with 133-MHz Pentium processor and 1.2GB hard disk drive now starts at $1,070. The Deskpro 6000 line, which offers Pentium, Pentium Pro, and MMX Pentium processors, had prices reduced by up to 23 percent, with low-end models priced starting at $1,560.

In Compaq's notebook lineup, the LTE 5300, 5380, and 5400 notebook computers got the largest cut, with a LTE 5300 now going for $3,399. The price was $3,899, a reduction of 13 percent. The Armada 4131T also had its price reduced from $3,399 to $2,999, a reduction of 12 percent. All three PC companion Windows CE handheld computers were part of the cost-cutting action. For instance, the C120+ had its price reduced from $699 to $499, a 29 percent drop.

While cutting prices on its entire Professional Workstation lineup, Compaq simultaneously announced that customers who purchase a Model 5000 in single- or dual-processor versions through June 30 can receive $500 towards the purchase of V70, P70, or QVision 210 monitors.

Compaq has started a special promotion for its ProLiant 5000 servers, as well. Customers purchasing systems from May 1 through July 31, 1997 will receive a free RAID (redundant array of independent disks) controller, a device for managing a group of hard disk drives. The controller normally costs $2,250. During the same period, purchasers of ProLiant 2500 midrange servers will get $500 back toward the purchase of a 4.3GB or 9.1GB hard disk drive.

In other news, Compaq is bolstering its server offerings with the addition of the ProLiant 6000 and ProLiant 850R. The ProLiant 2500 has been updated with new rack and tower-mountable versions.

The ProLiant 6000 offers up to four 200-MHz Pentium Pro processors and is suitable for use in large corporate environments, the company says. The system is upgradable to "next generation" Intel processor technology and offers up to 109GB of internal storage, up to 4GB of memory, and 11 expansion slots. The base model with one 200-MHz processor, 512KB of level-two cache memory, and 128MB of main memory is priced starting at $11,926.

The ProLiant 850R is a new single- or dual-Pentium Pro server that is in a smaller, rack-mountable form factor appropriate for settings such as data centers or Internet service providers (ISPs). Up to 14 of the servers can be mounted in an industry-standard rack cabinet. An 850R with single 200-MHz Pentium Pro, 256KB of cache memory, and 32MB of main memory starts at $3,333.