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Compaq debuts RadioShack PCs

The PC maker introduces four models exclusively for the consumer electronics giant, as a step to extend its reach in the retail market.

Compaq Computer (CPQ) today rolled out its first new systems destined for RadioShack (TAN) stores, evidence of recent measures to extend its reach in the retail market.

In January, Compaq moved to solidify its position as the largest manufacturer of consumer PCs by signing an agreement to become RadioShack's exclusive provider of computers, ousting rival IBM from one the largest electronics retail chains in the country.

Now, Compaq says it is offering four models priced as low as $999 exclusively to RadioShack, including one portable model.

The Compaq Presario 2246 comes a 233-MHz K6 MMX processor from Advanced Micro Devices, a 2.1GB hard drive, a CD-ROM drive, and a 56-kbps modem for $999. A system with 48MB of memory memory, a 6.0GB hard drive, a CD-ROM drive, and a built-in Zip drive from Iomega is priced at $1,399.

The notebook packs a 200-MHz Cyrix MMX processor, a 12.1-inch dual-scan LCD screen, a 2.1GB hard disk drive, a CD-ROM drive, and a 56-kbps modem. The 1220 is priced at $1,799.

Compaq and RadioShack later plan to launch a "store within a store," similar to a plan used by Apple Computer and CompUSA to boost Macintosh sales. Compaq says it will offer "interactive" sales using a kiosk that may include direct ordering of custom configured systems, according to analysts. The store-within-a-store plan is expected to be up and running by the third quarter of the year, according to Compaq.

The new models are being introduced as Compaq faces large inventories of its computers. Although the excess supply has so far only resulted in price cuts for business machines to date, analysts expect the company will soon cut prices on older consumer PCs, as well.