New PCs coming from Compaq

Compaq is releasing new computers for less than $1,000 tomorrow using non-Intel chips, heating up an already torrid low-cost PC market.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
2 min read
Compaq Computer is releasing new consumer computers tomorrow using processors from Advanced Micro Devices, heating up an already torrid low-cost PC market and demonstrating another vote of confidence for non-Intel chips in this segment.

AMD's K6 chip will appear in Compaq's Presario consumer line, a source close to the announcement confirmed today. At least one of the Presario-AMD computers costs less than $1,000.

Compaq's AMD machines have already been shipped to the distribution and retail channels, sources said.

The move is something of a setback for chip giant Intel, which has made a relatively late entry into the low-cost PC market. Compaq's announcement, however, is tempered somewhat by the fact that Hewlett-Packard today announced a series of low-cost PCs, including an $800 model, all with Intel processors. (See related story)

The Compaq-AMD alliance, as reported in October by CNET's NEWS.COM, comes as manufacturers and customers alike are flocking to the sub-$1,000 PC market, a phenomenon unforeseen only a year ago. Compaq's plans make it clear that AMD and Cyrix are emerging as significant processor players in the market for inexpensive PCs.

Some PC manufacturers have turned increasingly to chipmakers like AMD and Cyrix as the PC companies are forced to find ways of squeezing profits from the sub-$1,000 computer, whose margins are unforgiving. In many cases, processors from AMD and Cyrix cost less than comparable offerings from Intel. (Intel is an investor in CNET: The Computer Network.)

Compaq has thus far enjoyed a fair amount of success in the non-Intel sub-$1,000, market. The Presario 2200, which uses a Cyrix MediaGX chip and costs less than $1,000, has been one of the best-selling consumer computers in the second half of last year, according to Computer Intelligence.