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Micron cuts desktop prices

Micron reduces Millenia PC prices by up to ten percent, following a similar round of cuts at the beginning of June.

Micron Electronics reduced desktop prices by up to ten percent, following a similar round of cuts at the beginning of June.

The cuts come in the wake of Joel Kocher's being named to the post of CEO late last month and demonstrate his efforts to push Micron into the top five computer vendors.

The cost of a 400-MHz Pentium II Millennia falls to $2,099 from $2,199, ensuring the direct vendor's fastest system keeps pace with the falling cost of rival PCs from Dell, Compaq, NEC, and other major vendors.

Six weeks ago Micron's top-speed system was priced at $2,499. Four other Millennia models were also reduced today.

Continuing price cuts show that Micron under Kocher is anxious to gain market share. At a recent press conference, the former Dell and Power Computing executive said that the PC industry is on the cusp of a long-awaited consolidation, in which five or six vendors will drive the rest from the market. To survive, Micron will have to surpass several companies to leap into the top five of PC makers, Kocher stated.

"We're going to have to execute flawlessly in the next seven or eight quarters?to go from nine or ten to the top five in the next 24-month period," he noted, identifying the company's direct sales model as key to competitive pricing as well as lower inventory levels.

Today's cuts show Micron following that course, said International Data Corporation analyst Roger Kay, but the reductions don't reveal much in the way of more specific strategic initiatives.

"All companies are reacting to lower price points and dropping prices," Kay said. "Kocher committed to being extremely competitive [and], tightening up all aspects of [the direct] model. He made a lot of the right noises. We'll have to see how actual execution goes.

Micron's 400-MHz Millenia comes with a 6.4GB hard drive, 64MB of memory, a CD-ROM, video card, Microsoft Office 97, and a 17-inch monitor.

A similarly configured 350-MHz system falls to $1,999 from $2,099. A 300-MHz system now goes for $1,699, down from $1,899.