In a wide-ranging move, the notebook powerhouse slashed prices on 21 models in order to make way for new sub-$2,000 Pentium II and redesigned ultraportable notebooks announced earlier this week. Then too, notebook prices have been falling because of lower component costs, the coming of more Pentium II models.
The far-reaching discounts are a "normal course of business," said Michael Stinson, director of product marketing for Toshiba, contending that the price cuts were not due to any single factor. In fact, more notebook price cuts are expected after September 9, when Intel introduces its 300-MHz Pentium II for portable PCs and cuts prices on the rest of its mobile chip line.
|Toshiba notebooks, before and after|
|Model||CPU/hard drive||Old price||New||% change|
|Libretto 70CT||120-MHz MMX, 1.51GB||$1,299||$999||23%|
|Satellite 320CDT||233-MHz MMX, 4GB||$2,099||$1,699||19%|
|Tecra 780CDM||266-MHz PII, 5GB||$4,599||$3,999||13%|
|Tecra 780DVD||266-MHz PII, 8GB||$5,399||$4,799||11%|
"Toshiba has traditionally been the price leader on notebooks," he claimed. "This has been planned for quite some time," Stinson added.
Toshiba lost the No. 1 position in the notebook market last quarter to Compaq, the culmination of a long-term trend.
"That was one quarter out of the last six years that Compaq had a slight lead in the U.S. market only," Stinson explained. "Toshiba put an emphasis on our channel inventory. Those numbers were artificially low in order to get our business model in line."
Analysts agree that Toshiba needs to more effectively manage its inventory going forward. "They're simply cleaning out the channel," said Mike McGuire, a mobile computing analyst at Dataquest. "They're doing what they have to do to avoid the pitfalls of the last 18 months."
The most significant reduction brought the Libretto 70CT system down 23 percent, from $1,299 to $999. The older model incorporates a 120-MHz Pentium MMX processor and 1.5GB hard drive.
The Portege 320CT, featuring a 266-MHz Pentium MMX and a 4GB hard drive, was slashed from $2,999 to $2,799, a savings of 7 percent.
Toshiba also discounted its entire high-end Satellite Pro 490 and Tecra 780 lines, the company said. The Satellite Pro 490 CDT with a 233-MHz Pentium II now costs $2,599, while the Tecra 780 CDM with 266 MHz Pentium II now is priced at $3,999.
"[The price cuts are] also a function of the fact that they were facing a market that's saturated," McGuire noted. "Based on their business model, they're doing a nice job."
In related news, direct PC maker Dell announced discounts on selected notebooks and desktops, citing continued reduced component costs.
The ever-plunging prices of memory, hard drives, and LCD screens brought the Dell Latitude CPi M233ST with 12.1-inch active-matrix display, 233-MHz Pentium MMX, 32MB of memory, and 6.4GB hard drive from $3,198 to $2,898.
"Dell doesn't really have much choice in the matter," said McGuire. "There's too many Pentium IIs on the market."