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Loaded Pentium II beats $2,000 mark

Gateway's price/performance mark presages the Pentium II deals which can be expected for the holidays.

Gateway 2000 (GTW) has released a fully loaded Pentium II PC for under $2,000, a price/performance mark that presages the deals which can be expected for the holidays.

Although some vendors have released bare-bones Pentium II boxes for less than $2,000, the G6-233 stands out in that it's a complete, ready-to-use multimedia system, according to the company and others. The computer comes with a 233-MHz Pentium II processor, 32MB of SDRAM, a 12X CD-ROM drive, a 17-inch CrystalScan 700 monitor, a modem, and productivity applications.

"The key part of the description is the 17-inch monitor," said Kevin Hause, an analyst at International Data Corporation. "I would venture to say that this is the first full Pentium II from a major player. [Gateway] is a little ahead of the market."

Nonetheless, the lead will not likely last long, Hause added, as Intel is expected to announce further processor price cuts on November 1. "Intel is going to push the Pentium II into the consumer market," he said.

Gateway achieved the new price point by stripping away some features of an earlier model that cost $2,399, admitted Mike Sassman, desktop marketing manager at Gateway. The company dropped the standard disk drive size from 4GB to 2GB. In addition, the company stopped bundling a series of home and educational software titles, such as Earthworm Jim, Chaos Island: The Lost World, Barbie Storymaker, and Lotus Organizer '97.

The machine now comes with a small complement of titles, including Microsoft Works 95.

Further price cuts from Gateway are likely, he added, with the upcoming processor discounts. "It all depends on how deep the price cuts are at Intel," Sassman said.

For the fourth quarter, Hause said that Pentium II systems as well as systems for under $1,500 should sell well. The strength of the economy will push consumers into stores and catalogs while the comparatively high performance available on even the least powerful systems will continue to keep price pressure on for vendors. Systems under $1,500 could account for as much as 40 percent of total overall sales.

"There is no killer app. There is nothing out there that doesn't run as well on the $1,200 system as it does on a $2,200 system," he said.