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Wal-Mart, CompUSA selling branded PCs

In selling lines of custom-configurable machines that can be ordered via the Net, the two retail giants steal a page from Dell and Gateway.

Wal-Mart and CompUSA are not satisfied with selling you PCs. Now they want to build them for you, too.

Taking a page from Gateway 2000 (GTW) and Dell Computer (DELL), CompUSA, one of the nation?s largest retailers of PCs, today launched a line of PCs that customers can custom build and order over the Internet.

The CompUSA American Pro line of PCs can be configured to a buyer?s preference based on a smorgasbord of options including CompUSA American Series processor speed and type, CD-ROM drive, and even brand of speakers and sound card. Prices start below $,1000. Buyers select preferences using drop-down menus on CompUSA's Web site.

Wal-Mart, a large retailer known more for selling lawn chairs and soap, has also begun to sell PCs online under an in-house brand name. Its line of PCs typically offers full-featured configurations for less than $1,000. For example, its Avail line includes a model with a Pentium 166-MHz processor, a CD-ROM drive, modem, and speakers goes for $996.

Wal-Mart computers currently cannot be custom-built to the extent that CompUSA's can. But a spokesperson for the Colorado Springs, Colorado-based company that assembles the machines said that he expects this capability to be added to Wal-Mart's Web site in October.

In addition to the Gateways of the world, the competition includes tens of thousands of small, independent dealers, often referred to as "screwdriver shops," which assemble PCs from the most inexpensive components and sell systems at prices significantly below those of major brand names such as Compaq and even direct-marketers such as Dell.

These vendors have taken a large chunk of the individual-buyer and small-business market, mostly because of price and economics, according to Eric Lewis, an analyst at International Data Corporation.

"These guys cost too much to serve on a per-unit basis" to be targeted effectively by the largest vendors, according to Lewis.

But both vendors will also have to reconcile their online, in-house brand direct sales with floor-based sales of brand names. CompUSA sells all the major PC brands, including Compaq and Packard-Bell, and Wal-Mart has been selling inexpensive PCs from vendors such as AST.