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Return of the $100 PC

It's not exactly back to 1999, but attention-getting PC prices reflect a competitive environment that mirrors the market back then.

The sub-$100 PC is back--sort of.

On Sunday, CompUSA offered a $99.99 PC from America Online, similar to the $99 and free PC deals offered by Internet giants and start-ups back in 1999 and 2000 in an effort to woo customers. The PC, powered by an Intel Celeron chip and teamed with a monitor and printer, typically would have sold for $549.99, but came with $450 of instant rebates. Only five were allotted to each store.

To get one, customers had to sign up for a year of AOL at $23.90 a month.

Although the offer expired after a day, it represented a low mark for PCs in a year of substantial discounts. And if recent activity is any indication, it or similar deals will be back. Back in July, CompUSA offered a similar AOL PC with a 17-inch monitor for $199. Consumers also had to sign up for a year of AOL. (While the AOL brand is featured on AOL PCs, Systemax makes them.)

Similarly, one week offered a $198.99 PC with no subscription strings attached. The machine came with a 335 Celeron from Intel, 256MB of memory, a 40GB hard drive and a DVD-ROM. It once retailed for $649, but it came with $450 worth of rebates.

HP, , and others have tried to tout $499 laptops loaded with Windows, a previously unseen price point. With the holiday season approaching in a month, analysts expect PC makers to tout a wide variety of specials.

The $99 PC is part of what seems like a wave of late '90s nostalgia. Recent Internet initial public offerings--such as the stunner pulled off by Baidu--and multibillion-dollar acquisitions (such as Skype) resemble the sort of deals that occurred on a weekly basis back then.

Internet executives have also begun again to gather at fancy conferences where they deliver speeches to each other about the glowing future of technology, democracy and human potential.

But there's a gritty reality behind the new low PC prices. HP and Acer are trying to gain market share. Under new CEO Mark Hurd, HP is trying to regain lost ground to Dell. Acer, meanwhile, is aiming to build on its successes in the past two years that have made it the fastest-growing major PC maker in the world.

AOL, of course, is trying to boost subscriber numbers and rebuild its brand.

Component prices also continue to drop, allowing PC makers to cut the price of their retail products.