Big Blue also reduced prices on certain desktop PC models.
The price cuts follow reductions on IBM's 365XD ThinkPad line last month. That Pentium notebook has been one of the best deals on the market, coming with a high-quality active-matrix LCD screen and CD-ROM drive for less than $1,300.
In this round, prices of the ThinkPad 760X, 560, 380, 385D, and 365X series were reduced. The high-end 760XD model, for example, with a 166-MHz Pentium with MMX, a 3GB hard drive, 12.1-inch LCD screen, 32MB of memory, and a CD-ROM drive dropped $1,500 to $4,999, while other models in the 760X series fell by $1,000.
Only the low end of the 560 series was reduced, with the 133-MHz Pentium, dual-scan screen version of the ultraportable 560 cut from $2,499 to $1,999. The 380 series was cut across the board, with discounts of $400 to $500.
The price reductions come against a backdrop of large incentives to IBM dealers. The company gave distributors and large computer dealers--which buy directly from Big Blue--up to 6 percent in rebates to boost quarter-end sales. To qualify, distributors had to buy large numbers of computers and resell them to other parties.
"They definitely made an attempt in this quarter to throw money at the channel to excite some sales," said one distribution executive about the IBM incentives. "It was pretty rich. It made us work overtime."
But this could hurt IBM later in the year, analysts said. Next quarter, the company could ship fewer products because of softer demand from these channels.
The price cuts included systems in the ThinkPad 385D and 365X series. One model in the 365X line was reduced from $1,399 to $1,099, making it IBM's least expensive laptop and edging closer to the $1,000 barrier desktop systems are also now beginning to break. The 133-MHz Pentium system includes a 1.08 GB hard drive, 11.3-inch dual-scan screen, and 8MB of RAM.
Some of the price cuts may be a prelude to the release this summer of laptops based on the 200- and 233-MHz mobile version of the Pentium with MMX processor. Currently, the fastest available mobile Pentium tops out at 166 MHz.
IBM also announced it has cut prices about 20 percent on select 300GL desktop PC models. The PC 300 GL series will now start at $989, the company said. The new prices are effective immediately.