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Compaq offers free monitors

The company plans to offer free monitors and other items with its PCs in an effort to reduce inventory at its distributors.

Compaq Computer (CPQ) plans to offer free monitors and other accessories with its desktop personal computers for businesses in an effort to reduce inventory at its distributors.

Compaq will give away 15-inch monitors with its commercial desktop PCs and extend the memory promotion, which had been limited to high-end servers, to other units, the PC giant confirmed today.

Compaq, IBM, Hewlett-Packard, and others have been burdened with inventories of business systems, particularly server computers.

But problems at Compaq, the No.1 PC maker, have been the most prominent. "Their forecasts for the fourth and first quarter were way too aggressive," said Kurt King, an analyst with NationsBanc Montgomery Securities.

Pricing pressures won?t subside anytime soon. To relieve pent-up inventories, Compaq will cut prices through the first half of the year and offer a variety of promotions.

"We looked closely at our market and business plan once it became clear that sales out of our North American commercial channels were not meeting our expectations," said chairman Eckhard Pfeiffer recently in a prepared statement.

"We are putting in place price reductions and aggressive promotions in the first and second quarter to reduce these channel inventories and accelerate the implementation of our Optimized Distribution Model," he added.

Reuters contributed to this report.