The PCs affected are those with Intel's 350-MHz and 400-MHz Pentium II processors and also include the latest 100-MHz front-side bus, which allows the processor to "talk" to components at almost twice the speed of current system buses.
The Vectra VE with a 350-MHz Pentium II is expected to sell in retail stores for $1,219, a 14 percent reduction. The Vectra VL price has been reduced 8 percent to $1,629.
The HP Brio with a 400-MHz Pentuim II is expected to sell for $1,899, a decrease of 6 percent. The HP Brio with a 350-MHz Pentium II should sell for as little as $1,419 in retail stores, a drop of 8 percent.
HP's move is another sign that pricing in the industry is getting increasingly aggressive. Helping the charge is Intel, which yesterday slashed prices across its line of chips.
Some of the steepest price cuts came in the meatiest part of Intel's chip lineup. The 400-MHz Pentium II drops from $589 to $482, an 18 percent price decline.
The 350-MHz chip was slashed 29 percent from $423 to $299.
"We believe the imminent improvements in the price/performance of PCs may represent the most aggressive increase in the history of the PC market," wrote Mark Edelstone, semiconductor analyst at Morgan Stanley Dean Witter. Strong demand, combined with changes in how computer vendors carry inventory, in fact, could lead to an end-of-the-year backlog of orders for PCs for the first time since 1994.
The Vectra VE with 350-MHz Pentium II also includes 32MB of memory and a 3.2GB hard disk drive. At the high-end, the Brio PC with a 400-MHz Pentium II processor also come with an 8GB hard disk drive, 64MB of memory, CD-ROM drive, and Windows NT 4.0
(Intel is an investor in CNET: The Computer Network.)