Dell business PCs get cheaper

The PC maker cuts prices on high-end business desktops as much as 16 percent, as the direct-sales leader tries to stay ahead of the pack.

Dell will keep the heat on the rest of the PC industry by cutting prices on its high-end desktop computers.

Dell (DELL) has been able to undercut competing top-tier companies' PC lines because of its direct sales. The company said today that it has cut prices on its business PCs by up to 16 percent.

Compaq Computer and Hewlett-Packard announced double-digit price cuts earlier this month. Digital also responded with price cuts of up to 20 percent today. (See related story)

The round of price cuts is the fourth this year on the company's OptiPlex line of business desktop PCs.

Compaq, in particular, has been chasing down companies like Dell, which maintain cost advantages by selling directly to customers. This month, Compaq unveiled a new plan called the Optimized Distribution Model, a combination of manufacturing and distribution methods that slash operating costs by building PCs to individual customer specifications.

A 200-MHz MMX Pentium with 32MB of memory, a 2GB hard drive, and a monitor was reduced from $1,923 to $1,755, a 9 percent savings.

Dell says a 233-MHz MMX Pentium system with 64MB of memory, a 2GB hard drive, a CD-ROM drive, and a monitor was cut 16 percent, from $2,857 to $2,414.

A comparable Compaq Deskpro 4000 with a 233-MHz MMX Pentium, 32MB of memory, and a 3.2GB hard drive goes for about $2,050 at a major reseller. Compaq's system lacks a monitor and comes with less memory, though it does have a larger hard drive.