The company introduces the ThinkCentre A30 series, a line of less-expensive desktops aimed at small and medium-size businesses.
The new ThinkCentre A30 series desktops start at $469, according to IBM's Web site. They are designed to compete closely with Dell Computer and Hewlett-Packard on price. But following IBM's "Think" vision for PCs that are easier to use, the desktops include extra software, such as the Rapid Restore Ultra utility for packing up files, designed to make the desktops less difficult to implement and manage.
The new ThinkCentre A30 models fill in the ranks of IBM's ThinkCentre lineup, which made its debut on May 20.
IBM's lowest price ThinkCentre A30 series is the 819911U model, which starts at $469. It includes a 2GHz Intel Celeron processor, 128MB of RAM, a 40GB hard drive, a CD-ROM, a floppy drive and a modem. It relies on built-in graphics from Intel and comes with Microsoft's Windows XP Home Edition operating system. It offers a one-year warranty.
Another A30 model, the 819913U, adds a CD burner and an 80GB hard drive and starts at $639, according to the site.
The new models from IBM renew its focus on smaller businesses. Small businesses have become a major area of focus for large PC manufacturers because of the number of PCs the businesses collectively purchase. IBM, Dell and HP have all launched numerous programs to lure small businesses over the past few years.
The competition is fierce. While IBM's price starts at $469, Dell's least expensive small business PC, a version of its Dimension 2350 desktop, starts at $399. The Dimension includes a 2.2GHz Celeron chip, a 30GB hard drive, a CD-ROM and a one-year warranty for that price. However, in order to hit $399, it excludes a floppy drive and a modem. Adding the modem and floppy drive back in to match IBM's A30 increases the Dimension's price to $449, according to Dell's Web site.
Meanwhile, HP's Compaq Business Desktop d330 starts at $449 and comes with a 2.2GHz Celeron processor, a 40GB hard drive, a CD-ROM and a three-year warranty. It excludes a floppy drive and a modem. Adding them back in to match IBM's product boosts the d330's price to $484, according to HP's site.
Although Dell has a $20 advantage over IBM on a similarly configured small-business desktop, IBM is still in the ballpark, analysts say.
"IBM is definitely playing ball. It's more competitive on pricing than it has been," said Toni Duboise, desktop PC analyst at ARS. "It's important to be competitive (on price) the way that the market is today."
But IBM should consider offering an even lower priced model to match Dell's $399 opening price, Duboise said. This would help lure customers looking only for the lowest-priced PC possible, no matter how it is configured, she said.
"The problem with not offering a $399 is those first looks. IBM has to play lowball too," Duboise said. "Still, there's an advantage to IBM. IBM offers a more complete package for IT buyers looking for support. IBM has always had the edge there."
Dell and HP have been racing to catch up on support. HP recently launched a program under which it will dispose of companies' old desktop PCs, replace them with new ones and manage them for a fee.
To date, IBM lists only a handful of A30 models on its site. However, IBM is expected to offer additional models in the future. The ThinkCentre family will replace IBM's NetVista brand PCs over time.