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HP's new notebook: How low can it go?

Hewlett-Packard will unfurl a new Athlon-based notebook for small businesses on Monday, including one model that will retail for $899--its cheapest to date.

Hewlett-Packard will unfurl a new Athlon-based notebook for small businesses on Monday, including one model that will retail for $899.

The Compaq Evo N1015v notebook will be targeted mainly at small-business, education and government customers, said Helen Daniel, a product manager in HP's notebook division. The base level configuration--which comes with an Athlon XP 1400+ processor, a 13.3-inch screen, a 20GB hard drive, and 128MB of memory--is the company's cheapest business notebook to date at $899, she added.

Since completing its merger with Compaq Computer, HP has become increasingly aggressive in the notebook market, churning out new products and cutting prices at a more rapid rate than in the past. Although Compaq has become part of HP, it continues to use the Compaq brand on notebooks and desktops.

The low prices on the new notebook line are in part due to HP's decision to adopt processors from Advanced Micro Devices, according to Daniel. HP is the largest PC maker using AMD's chips. Sunnyvale, Calif.-based AMD often sells its chips for substantially less than Intel.

HP sells small-business desktops and notebooks containing AMD chips. The new portables will replace the Evo N115 line, which also contained AMD chips, Daniel said.

Still, "with what they are doing with price drops, they are definitely cutting margins," said Matt Sargent, an analyst at research firm ARS.

Daniel declined to discuss margins but said that the company is trying to stay competitive, which is difficult in a relatively slow market.

Not to be outdone, Dell Computer has also been cutting prices. Recently, it started selling Latitude notebooks, geared toward businesses, containing 2GHz chips for the same price as it sells Latitudes with 1.7GHz or 1.8GHz chips, a move that can be seen as either a discount or a megahertz giveaway. A Dell representative said that, to her knowledge, that strategy was a first for Dell.

In all, HP will come out with a variety of configurations of the N1015v. For $999, consumers will get the same notebook but with a Wi-Fi module for wireless computing that plugs into the Multiport slot found on the back of the screen on Compaq computers.

Other models come with larger screens and faster processors.