HP launches PC trade-in program

Under the program, the company will allow its business customers to trade in older, brand-name desktops for a credit on a new HP desktop. Depending on the type of desktop traded, the customers will receive a discount of up to $220 on a new HP Evo D510 system, the company said in a statement.

Typically, companies have replaced their desktop PCs every three or four years. But because of the economic downturn that started in late 2000, many companies have been keeping their PCs longer, stretching out the normal replacement cycle.

The longer PC replacement cycle contributed to a decrease in shipments for the worldwide PC market in 2001, and to nearly flat sales in 2002. The environment also markedly increased the competition for customers among PC manufacturers.

Since its merger with Compaq Computer last year, HP has since been working to become more competitive with its business PC rivals, including Dell Computer and IBM. Coincidentally with the announcement of the trade-in program, market research firm Gartner reported that in the first quarter of 2003, Dell had nosed out HP in a tight race for the No. 1 spot in shipments of desktops, notebooks and Intel-based servers.

In recent months, HP has lowered its PC prices by about 15 percent, with the aim of matching Dell's prices. It has also introduced new products such as its tablet PC and Media Center PC.

"HP is continually finding ways to create value for our customers and enable them to increase efficiency with more recent technology," said John Thompson, vice president and general manager for commercial products Americas at HP?s Personal Systems Group. "Here we have taken the responsibility of PC removal, often seen as a barrier to PC replacement, out of the customer?s hands, making it easier and more affordable for them to get the new HP products they want."

The trade-in program will give customers a credit for brand-name PCs based on Intel Pentium II, Pentium III, Pentium 4 and Celeron processors. It will also cover shipping costs, the company said.

But competition between the big-three business PC manufacturers will continue to be intense. Dell offers a number of incentives, including free component upgrades, free shipping, and rebates and instant discounts for its business PC customers. These promotions lower the price of its PCs in a manner similar to HP's trade-in discount.

Meanwhile, IBM plumps up its PCs with adds extra software and security features. The extras are designed to make IBM PCs easier to use, set up and maintain, as well as to help secure data, the company has said.

Businesses don't typically make their PC buying decisions on price alone. They evaluate factors such as ease of setup, serviceability and overall reliability, all of which affect the total cost of maintaining a PC throughout its life.

The HP trade-in promotion is only available in the United States. It runs through June 30.