Compaq slashes notebook prices

Compaq Computer made cuts of up to 25 percent today on its low-end and midrange Armada notebook PC lines. The discounts come amid price reductions by other major notebook vendors, including Hewlett-Packard, Acer America, Apple Computer, and Toshiba.

Observers believe the price cuts are further evidence of the top PC maker's unrelenting push to increase market share. The company has released a number of new notebooks over the past six months that span both the business and consumer markets. Compaq is one of the few manufacturers to have a full line of notebooks--the Presarios--targeted at both the consumer and retail markets.

Aside from traditional heavyweight players such as IBM (IBM) and Toshiba, Compaq is getting additional pressure from Dell and Gateway 2000, which are gaining share in the notebook market.

The Armada 4100 line was the most heavily hit, with a 17 percent discount on the 4110 model--from $1,199 to $999--and a 25 percent discount on the 4110D--from $1,599 to $1,198. With its modular design, the 4100 line is targeted at users who need both a slimline notebook for mobile use and multimedia options for presentations and desktop work.

Prices of Armada 1500s, aimed at business users, were also dropped, although to a lesser extent. The Armada 1530, a 133-MHz MMX Pentium notebook, was discounted by 14 percent--from $2,899 to $2,499. The 1550, which has an active matrix screen, was cut 6 percent--from $3,199 to $2,999. The 150-MHz MMX Pentium Armada 1580 was reduced 5 percent--from $3,699 to $3,499.

Compaq's decision to reduce prices is most likely due to competition in the marketplace, rather than advancing technology, said Katrina Dahlquist, an analyst with International Data Corporation.

Dahlquist did note, however, that manufacturers traditionally make price cuts on their computer lines during August. Price cuts on systems are also sometimes an indication of upcoming models, as manufacturers make room in their pricing structure for new systems while keeping older ones price-competitive.

New notebooks are in the offing based on Intel's 200- and 233-MHz version of the Mobile Pentium processor. Intel may also bring out a 266-MHz version of this processor.