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Gateway portables mark price drops

Gateway introduces new Solo models featuring the mobile Pentium II, at price points that demonstrate "compression" in the market.

Gateway introduced a new lineup of notebooks featuring the mobile Pentium II processor, at prices that seem to be more evidence of falling costs owing to "compression" in the portable market.

Intel debuted its mobile Pentium II just seven weeks ago, and every major notebook vendor duly announced products based on the new chips--at historically low prices. Since then, Gateway has cut prices on those products, and now expanded its Pentium II notebook offerings with a line called Solo.

Back in April, top-flight systems from major manufacturers were unveiled at prices as low as $2,700, about $1,500 less than the typical new, high-end notebook of the past. IBM, Dell, Hitachi, and Gateway all came in at or below $3,000.

The upshot: When high-end system prices come in at this level, midrange and low-end notebooks feel the squeeze and ultimately dive in price, establishing a whole new pricing structure. The phenomenon is known as price "compression."

Today's announcement includes a midrange system for under $2,600. Gateway's Solo 2500LS features a 233-MHz Pentium II, 32MB of memory, a 12.1-inch active-matrix display, a 2GB hard drive, a CD-ROM drive, and a 56-kbps modem for $2,599.

The multimedia-heavy line tops out with the 2500KL, which comes with a 266-MHz Pentium II chip, 32MB of memory, a 13.3-inch active-matrix display, a 4GB hard drive, a CD-ROM, and a 56-kbps modem for $3,599.

The line begins with the low-end 2500SE, with a 200-MHz Pentium MMX chip, 32MB of memory, a 12.1-inch display, 2GB hard drive, CD-ROM, and a 56-kbps modem for $1,899.