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Dell cuts desktop, notebook prices

The cuts reflect a heightened sensitivity to low-cost computers and falling component prices.

Dell (DELL) today announced a new round of price cuts on its line of corporate desktop computers and some of its most sophisticated notebook PCs, reflecting a heightened sensitivity to low-cost computers and falling component prices.

Dell cut prices up to 14 percent on Optiplex desktop PCs with Pentium II processors, saying that the latest reductions are the result of component cost savings. The company also cut prices by up to 10 percent on its recently introduced Latitude CP and Inspiron notebooks.

The price cuts may be another signal that demand for high-end PC systems is slowing because there aren't any compelling reasons to upgrade to newer technology. They're set against the backdrop of a free fall toward the $1,000 mark, the new benchmark for low-cost PCs.

Most of the vendor activity in the corporate market has lately taken place in the sub-$1,000 segment. In late November, IBM (IBM) cut prices on its business machines by 10 percent, resulting in Big Blue's first new business model priced below $1,000.

Compaq (CPQ) and Hewlett-Packard (HWP) have also been aggressively cutting business PC prices in the last few months, driving low-end business PC prices below the $1,000 mark.

In the OptiPlex line of PCs, which are generally high-end machines, the GXaM with a 300-MHz Pentium II processor, a 17-inch monitor, and 128MB of memory, falls to $3,163 from $3,674. The GXaL, featuring a 266-MHz Pentium II processor, a 15-inch monitor, and 64MB of memory, drops to $2,096 from $2,346.

An Inspiron 3000 notebook, aimed at small businesses and individual users, is now being offered with a 233-MHz MMX Pentium processor, a 13.3-inch active-matrix display, and 32MB of memory for $3,399, a reduction of 10.5 percent.

Dell's corporate notebook, the Latitude CP, is now priced at $4,199 for a system with a 233-MHz Intel MMX Pentium processor, a 13.3-inch XGA active-matrix display, and 32MB of memory, representing a cut of over 10 percent. The Latitude comes with a 3.2GB hard drive, larger than the Inspiron's, and several other business-oriented features.

In related news, Dell said Stephan Godevais joined the company as vice president of the Inspiron line of portables. Prior to joining Dell, Godevais spent three years at Digital Equipment (DEC), where he was the vice president of Digital's mobile business segment.