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IBM to cut server prices

The Netfinity line of computers will drop up to 21 percent as Big Blue seeks to make the product more visible.

IBM will cut prices up to 21 percent on its Intel-based Netfinity servers on Monday.

Big Blue has been pushing to make the Netfinity a more visible product line since chairman and chief executive Lou Gerstner told the company a year ago to stop holding the product back to protect its other server business. Part of the effort is the X Architecture plan to bring high-end server technology to the Netfinity series.

The deepest cut will be at the low end of line, with IBM cutting the price for the 350-MHz Pentium II-based Netfinity 3000 from $2,195 to $1,899, IBM spokesman Mike Corrado said.

The Netfinity 7000M10, a high-end server with four 400-MHz Pentium II Xeon chips and 128MB of memory, will drop in price 12 percent from $11,399 to $9,999. And the mid-range Netfinity 5500M10, with two 400-MHz Xeon chips and 128MB of RAM, was cut 5 percent from $7,525 to $7,129.

The cuts are taking place because of declining component prices, Corrado said.

IBM, however, also has some new products on the way. Among them is a server with eight Xeon processors that IBM will display at the Comdex computer show starting November 16. The eight-way server will ship sometime between the first and second quarter of 1999, when Intel comes out with a new supporting chipset, Corrado said.

One such X Architecture technology is the ESCON adapter, a plug-in card for Netfinity servers that will give them a 200-mbps connection to IBM's high-end S/390 servers. IBM will be showing the adapter at Comdex, Corrado said.

The move to strengthen Netfinity is going well, Corrado said. IBM's Netfinity sales increased 30 percent in the third quarter of 1998 compared to the same period in 1997, he said.

The price cuts also will mean that an upgrade from a 400-MHz Pentium II chip to a 450-MHz chip will cost $1,899 instead of $2,109, and the price of the upgrade to an 18.2GB hard disk is $1,759 instead of $2,049.

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