Top notebook prices dive quickly

The latest wave of high-end notebooks is pushing down the costs of notebooks that were much pricier only a week ago.

Systems based on Intel's 266-MHz Pentium II processor that were introduced in the last few months--or weeks in some cases--have dropped steeply as new models based on the 300-MHz chip take their place. Two of the most prominent examples are flagship systems from Compaq and IBM.

Compaq Armada 7400

Pricing for Compaq?s Armada 7400, which was just introduced in August, has dropped dramatically, in the wake of the introduction of new systems with Intel?s latest and greatest 300-MHz Pentium II processor.

At Computer Discount Warehouse, a major online reseller, the Compaq 7400 with 266-MHz Pentium II and 13.3-inch screen was priced at around $4,000 only last week. Today it's going for $3,187. This new pricing also is reflected at resellers such as NECX.

This is the first notebook from Compaq with a durable magnesium case. Also at CDW, IBM's top-selling ThinkPad 600 with 266-MHz Pentium II is down from its lofty price range of around $4,400 to about $3,900 at various resellers. It was introduced at a suggested retail price of $4,599.

David Thor, notebook analyst with Sherwood Research, said: "The promise of a strong Intel [mobile chip push] has caused people to aggressively get rid of machines. They want to make these things move."

Because Intel is moving more aggressively with notebook PC chips, "everyone is revving their products," he said.

IBM's Pentium II ThinkPad 600

Another reason for aggressive repricing for some vendors is the large gap that still exists between notebook and desktop prices.

Notebooks with relatively poky 233-MHz Pentium II chips are selling for $2,000 and above while the 300-MHz systems sell for between $3,600 and $5,000. By contrast, a fully loaded 450-MHz Pentium II desktop sells for around $2,200. A 300-MHz Pentium II system can be had for $1,200.

On top of this, notebook sales have been slowing, especially when compared to their desktop counterparts. Annual growth in unit sales of desktops outpaced notebook growth in the second quarter, according to both International Data Corp. and Dataquest.