Digital to make $900 business PC

The new computer also kicks off a rebranding effort by the Maynard, Massachusetts-computer manufacturer. Venturis and Celebris, the space-age yet somehow inelegant names Digital has used for its two computer lines, will be retired. Digital's new computer lines will be known as the PC 3000 Series and PC 5000 Series. Price cuts of up to 22 percent go into effect the same day.

Digital is the latest major computer maker to jump into the sub-$1,000 business PC market and will apparently take the lead by pricing a model with an AMD K6 processor at $899. Both Hewlett-Packard and Compaq have introduced new business PCs priced below $1,000, but neither have priced systems below $900.

IBM has yet to bring out either a business or consumer PC targeting the sub-$1,000 market. Compaq and Packard-Bell are both leaders in the sub-$1,000 market for consumer PCs.

The Digital PC 3010 will come in two basic configurations, according to sources at the company. The $899 version will come with a 166-MHz MMX-enabled K6 processor, while a version priced at $969 will come with a 166-MHz Pentium MMX processor from Intel. Both systems will include 16MB of memory and a 1.2GB hard drive.

Through December, Digital will offer the AMD version of the PC 3010 with a 14-inch monitor for $999. The system ships Monday.

Although the sub-$1,000 computer is still a relatively new phenomenon, it is finding great acceptance in the marketplace, particularly at retail stores where consumer PCs are sold. Various analysts peg the sub-$1,000 sector as one of the fastest growing segments in the PC market.

Compaq's Presario 2200, which contains a Cyrix chip, is the current low-price leader among consumer PC offerings. It lists for $799, or $999 with monitor. A number of second- and third-tier manufacturers also have low-cost computers. Micro Electronics, for instance, is marketing a 166-MHz Cyrix Media GX computer for $499 without monitor.

IBM, for its part, has concentrated primarily on high-priced luxury computers for the home. Yet Big Blue is expected to enter the sub-$1,000 consumer PC arena, according to Kevin Hause, an analyst at International Data Corporation. "Given their manufacturing partnership with Acer, they could do it with very little risk," he said.

IBM has dropped plans for a low-cost corporate Net PC based on an Intel processor, though it is offering low-cost PCs configured specifically for users with minimalist needs in networked corporate environments.

In contrast to consumer PC buyers, large corporate customers focus on lowering the overall cost of a PC over its lifetime, and initial cost is only one factor in this larger cost equation. Nevertheless, the prices for capable, Pentium-class PCs are on a downward trend which, on a broad scale, impacts corporate buying decisions.

In related pricing news, Digital is also cutting prices on existing systems. The Venturis FX-2 becomes the Digital PC 3100 and will be discounted ten percent to $1,049. The computer contains a 166-MHz K6 MMX processor, 16MB of RAM, and a 2GB hard drive, a configuration similar to the $899 PC 3010 but with a larger hard drive.

The Celebris FX-2, which contains a 200-MHz Pentium MMX processor and 32MB of RAM, becomes the Digital PC 5100 and gets reduced ten percent to $1,599.

Higher up the performance scale, the Digital PC 5400, formerly the Celebris GL-6200, will be discounted nine percent to $2,088. The system comes with a 200-MHz Pentium Pro and 32MB of RAM.

Finally, the Digital PC 5500, formerly the Celebris GL-2, which comes with a 266-MHz Pentium II processor, will be discounted 22 percent to $2,953.

Chipmaking giant Intel is expected to discount processors at the end of the month. Other manufacturers have already cut prices in anticipation of the cuts.