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Dell cuts price of consumer PCs

Cuts of up to 13 percent on the Dimension line of high-end consumer systems come as IBM touts it $599 PC.

Dell cuts prices up to 13 percent on its Dimension desktops for consumers and small businesses earlier today, a move which coincides with a company effort to penetrate the small office-home office (SOHO) market.

Dell garners the lion's share of its revenue from sales to large corporations, educational institutions, and government offices, according to analysts. Recently, however, the direct vendor has been enhancing programs to reach small to medium-sized offices and home users, according to David Clifton, a Dell spokesman.

Although today's price cuts come as a result of cuts on Intel processors earlier in the week and price erosion on other components., the discounts will likely make Dell a more attractive product for this market. Roughly $200 was taken off the price of Dimension machines.

Dimension desktops now range in price from approximately $1,300 to $2,300. At the low end sits the Dimension 350, which comes with a 350-MHz Pentium II, a 6.4GB hard drive, 32MB of memory, and a 15-inch monitor. Dell cut $200 off the price and is selling it for $1,314. The Dimension XPS R400, which comes with a 400-MHz Pentium II, 64MB of memory, a 17-inch monitor and a 10GB hard drive, meanwhile, was cut from $1,932 to $1,700.

Intel cut its Pentium II processor prices on Sunday by approximately 20 to 30 percent. Dell officially didn't not cite Intel, but said that component price drops paved the way for today's cuts.

"Dell's direct model enables us to keep low component inventories that enable us to give customers immediate savings when component prices are reduced," said Paul Bell, senior vice president of Dell's home and small business group in a prepared statement. "Because of our inventory management, Dell is able to offer some of the newest technologies at low prices while our competitors struggle to sell off older products. "