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Micron readies sub-$1,000 PC

Micron announces a fully-configured sub-$1,000 PC, an indication that the low-cost PC trend is catching on at direct marketers.

Micron has announced a fully-configured sub-$1,000 PC, an indication that the low-cost PC trend is catching on at direct marketers, which to date have shied away from this segment.

For $999, Micron is offering a system with a 233-MHz MMX Pentium, 16MB of memory, a 3.2GB hard drive, and CD-ROM drive. A 15-inch monitor is available for an additional $200.

Direct marketer Gateway 2000, by comparison, is taking a different approach, selling a higher-priced, but more complete, bundle including a monitor and printer to compete with sub-$1,000 offerings. Gateway has incorporated Intel's 233-MHz Pentium MMX chip into its G5-233 model, which comes bundled with a 15-inch monitor, a 56-kbps modem, and a color printer for about $1,500.

Dell Computer has yet to make a serious push into the sub-$1,000 PC segment, preferring to offer high-end configurations with all the bells and whistles.

Although initially viewed with skepticism, the sub-$1,000 PC has become a defining fact of life in the high-tech industry. Systems for under $1,000 will likely wind up constituting close to 32 percent of the retail market in 1997, according to Computer Intelligence, a major marketing research firm. In the beginning of the year, the segment accounted for about 9 percent of sales.

As a vehicle to spread technology, the low-cost PC will be instrumental. Inexpensive PCs will likely begin to pop up in corporations and also as the second and third units in wired homes.

While these computers have raised the consciousness of buyers, they have also raised uncomfortable questions for manufacturers. Success for PC and chipmakers in the future may depend on the ability to sell high volumes of product at low margins. How manufacturers adapt is a question that may not require an immediate answer, but it is not going away.

Micron, for its part, appears to have worked out a viable business model for selling cheap PCs directly. "This machine epitomizes the benefits customers receive when purchasing from...the direct channel--new technology, quick delivery, competitive pricing," said Micron Electronics Vice President of Desktop Products Jeffrey K. Moeser.

Same day shipment of the Micron Millennia SE is available through the ComputersNow program by ordering online at Micron's Web site.