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Compaq price cuts look ahead

Compaq trims prices on a few consumer PCs, a move that preempts processor price cuts and new Intel Celeron chips coming in the very near future.

Compaq trimmed prices on a limited number of consumer PCs, preempting processor price cuts and new Celeron chips from Intel coming in the very near future.

The Houston-based PC vendor also reduced prices on three notebooks using non-Intel chips.

The limited pricing action is unlikely to be the last from major vendors in the next few weeks, as yesterday Intel announced it will release 300-MHz and 333-MHz Celeron chips with 128K of integrated "cache" memory in time for back-to-school buying. Previously, these chips were slated for the fourth quarter.

Intel also said it would cut processor prices on July 26. Notably, the 300-MHz Celeron processor will drop from a retail price of $140 to close to $100, while the 400-MHz Pentium II will decline from $675 to $550 in volume.

A Presario 5020 desktop falls from $1,199 to $999, after a $100 rebate by mail. The system includes a 300-MHz version of the low-cost Celeron chip, 64MB of memory, an 8.0GB hard drive, a CD-ROM, and a modem.

Also including the rebate, the Presario 5140 drops to $1,999 from $2,199. The faster, fuller-featured desktop contains a 400-MHz Pentium II and a 100-MHz system bus, which is speedier than the 66-MHz bus found on most consumer systems. A bus is the critical data pathway between the processor and main memory.

The 5140 also comes with 96MB of memory, a DVD-ROM drive, a built-in 100MB Iomega drive. Equipped with a 56-kbps modem, the system is cable modem-ready.

None of Compaq's five discounted systems includes a monitor.

The mail-in rebates are part of Compaq's Easy Internet Access program, announced in June. The promotion offers $100 to customers who sign up on a trial basis with GTE, Compaq's preferred service provider, and touts 50 free hours.

In the notebook arena, Compaq cut the price of three models by $200 each. Two of them incorporate high performance addressing (HPA) screens, an improved dual-scan technology.

Also unveiled just last month, the Presario 1230 incorporates a 233-MHz Cyrix MediaGX chip, a 12.1-inch screen, and a 3.2GB hard drive. It falls to $1,499 from $1,699.

The 1625, with a 266-MHz AMD K6 chip drops to $1,999. The 1640, now priced at $2,299, comes the same chip but an active-matrix screen.

Notebook prices have been dropping in advance of Pentium II-based portables expected to reach the market later this quarter and throughout the fall.