Basic configurations of the Pavilion a1030e and a1000y can now be ordered for $249, after a $50 rebate. The a1030e comes with a Sempron 3000+ processor (1.8GHz), a 40GB hard drive and 256MB of memory. The other model is similar but comes with an Intel Celeron chip.
The PCs do not come with monitors. However, consumers who buy a 15-inch flat panel monitor and customize their PCs by adding more memory or upgrading some other feature get an automatic upgrade to a 17-inch flat panel monitor, a $50 discount.
Price declines are an ordinary part of the PC world. Because chips and other components steadily improve in performance, there is always a steady supply of once-cutting-edge components floating around the industry that computer makers can buy to fashion budget offerings.
In the past few months, PC makers have been trying to low-ball each other with $399 desktops. (In 1997, Compaq Computerwith the first sub-$1,000 desktop from a major label. Now, buying a $999 desktop takes some effort.)
Notebooks are getting cuts too. Last month, for instance, HP and Acer trotted out , a new low-water mark for major PC makers. In the past, only second-tier manufacturers offered laptops at this price, and even then they didn't include Windows.
More notebooks at this price range are expected to arrive during the back-to-school period in September, said Stephen Baker, an analyst at NPD Group.
"Back to school looks to be big. It will probably surpass 2003," he said in a recent interview.
HP has particular motivations to cut prices. The company's fiscal quarter ends at the end of the month and it has been losing market share to Dell.