IBM had already cut prices two weeks ago, but is instituting this latest price cut "to maintain [pricing] leadership," the company said.
"When a key competitor moves in response to our actions, we will act fast to rebalance the scale in our favor," said Robert M. Stephenson, senior vice president and group executive at the IBM PC Company.
IBM reduced prices across the board on its PC 300 line. A PC 300, for example, with a Pentium 100-MHz Pentium processor, 8 MB of RAM, and a 540MB hard drive now starts at $1,499. The PC 300 with a 133-MHz Pentium, a 1.2GB hard drive, and 16MB of memory starts at $2,303.
IBM also reduced prices on its new PC 700 models. The entry-level PC 700, for example, with a 100-MHz Pentium, 16MB of RAM, and a 1.2GB hard drive was reduced by $220 to an estimated street price of $2,192.
Compaq announced on Monday across-the-board price cuts of up to 21 percent for its business desktop PCs. Digital followed yesterday with cuts of up to 19 percent for its Venturis commercial desktops and up to 26 percent for selected Celebris GL 590 slimline models. HP also yesterday cut prices up to 21 percent for its NetServer series of PC servers.