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Rockwell, HP sign $100 million PC deal

Rockwell plans to buy thousands of Hewlett-Packard computers during the next three years, HP says.

Rockwell plans to buy $100 million worth of Hewlett-Packard computers during the next three years, the computer maker plans to announce tomorrow.

The deal is for tens of thousands of systems, mostly Vectra desktop models costing between $1,000 and $1,700, said HP spokesman Larry Sennett, but also servers, workstations, and portables. Rockwell will standardize its Intel-based computers on the HP brand, the company said.

"It's a big win," said Anne Bui, an analyst with International Data Corporation, who tracks PC shipments worldwide. "It's pretty significant for three years to stick with Hewlett-Packard."

A company such as HP can expect only a handful such deals a year, she said.

PC makers have been hit by dropping profit margins as PCs have been getting steadily cheaper. This deal, though, "is not a low-end purchase," Sennett said.

Earlier this year, average selling prices for business PCs have dropped, "but not as precipitously" as in 1998, Bui said.

Other companies, including IBM, Compaq Computer, and Dell Computer, also bid for the contract, Sennett said.

In large businesses, Dell has been leading the pack, stealing market share away from Compaq, Bui said. HP, in comparison, lost market share in the first quarter of 1999, the most recent period for which statistics are available, Bui said.

Rockwell could not be reached for comment immediately. Though laptops aren't a major part of the Rockwell purchasing plans, HP has had several large orders in the last 45 days it plans to announce soon, Sennett said.