The company confirmed it will take another step later this quarter when it unveils high-end models based on Intel's new Xeon processor, which was released late last month.
IBM unveiled its entry-level Intellistation E Pro series earlier in June, but already the company has reduced its starting price 13 percent, to $2,345 from $2,700. The basic system comes with a 350-MHz Pentium II processor, 64MB of memory, a 4.5GB hard drive, and a 2D graphics subsystem from either Matrox or 3Dlabs.
Simultaneously, the M Pro series was reduced to a starting price of $2,910. The midrange line comes with faster hard drives, more sophisticated 3D graphics subsystems, and more drive bays for expansion.
In a prepared statement, IBM said the price drops can be attributed to the company's Advanced Fulfillment Initiative (AFI), a multifaceted manufacturing scheme intended to lower costs by reducing inventory. Under AFI, resellers, not IBM, perform the assembly and inventory functions. Intellistations are in fact the first IBM PCs assembled by a reseller with responsibility for processor and memory configurations, according to IBM.
Today's cuts may also reflect IBM's reorganizing its pricing structure in advance of the Xeon systems. Xeon processors are higher-performance, higher-margin products intended both to compete with more traditional Unix-based workstations. The introduction of new high-end products, however, typically means cuts on existing products.
Also today, IBM announced its Web Design Bundle, a hardware-software package for Web designers that features a 400-MHz M Pro workstation and leading applications such as Adode's Photoshop, Premiere, and Illustrator and Macromedia's Flash 3.
The package targets upgrade customers as well as new business, according to Linda White, a Web server executive at IBM.
"We tried to complete the palette for Web designers," she said. "We're trying to win new seats as well as upgrades."
Photoshop, used to edit digital images, and Premiere, for video and audio editing, were both recently upgraded.
Along with the software, the 400-MHz M Pro comes with 256MB of memory and a 9.1GB hard drive for $4,850. With a 21-inch monitor and a flatbed color scanner, the price is $6,480.