Gateway joins Pentium II trend

Gateway 2000 introduced two low-cost, high-end desktops, joining a growing list of PC manufacturers introducing high-performance Pentium II systems at ever lower prices.

The new Gateway G6 systems feature Intel's fastest Pentium II

Gateway's G6 with 333-MHz Pentium II

processors and come with a host of high-end features starting at under $2,000. By contrast, in July 1997, the Pentium II processor itself was selling for $1,900 and systems were well above $3,000.

Aside from diving processor costs, lower prices on other components have allowed companies to bring prices down even more dramatically.

"Intel has accelerated the price drops on processors a little bit, but there are other issues," said Kevin Hause, an analyst with International Data Corporation. "Components like memory and hard drives have really come down in price to enable you to construct a system with the latest and greatest [for] $2,000 that used to cost almost twice as much," he exclaims.

In the past, high-end models like these commanded prices of $3,500 and up. Now, as prices for systems based on the older Pentium MMX processor slip further down below the $1,000 mark in retail stores, a second wave of low cost computing is crashing on the PC industry.

Prices of Pentium II-based systems are already following in the wake of the sub-$1,000 systems that were popularized last year. A number of systems that were originally priced at $2,500 and above are now available in the $1,200 to $2,200 range.

Gateway's G6 system with a 300-MHz Pentium II, a 4GB hard disk drive, a 32X CD-ROM drive, a modem, and a 17-inch monitor goes for $1,999.

A model with a 333-MHz Pentium II processor, 17-inch monitor, a DVD-ROM drive, a 6.4GB hard disk drive, 64MB of memory, and a modem will be priced at $2,499.