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Compaq hits new low: $699

Compaq appears to be shattering yet another price barrier and possibly setting the stage for a new category of consumer systems.

A Presario model from Compaq (CPQ) has pushed the price of a full-featured PC to as low as $699, as sales of low-cost PCs continue apace.

With the Presario 4212ES, Compaq appears to be shattering yet another price barrier and possibly setting the stage for a new category of consumer systems priced well below $1,000.

The appearance of this model comes as sub-$1,000 PCs are hitting levels close to 50 percent of retail sales at some major stores during the holiday season.

Sales of sub-$1000 PCs are expected to constitute between 40 and 42 percent of all sales in December, according to preliminary research from market research firm Computer Intelligence. Such figures would represent the highest market share that the inexpensive systems have achieved so far this year.

"That's pretty amazing considering that these machines made up only 7.2 percent of sales in January of this year," said CI analyst Matt Sargent.

Interestingly, the price for the 4212ES is being achieved with an Intel MMX Pentium processor, not an alternative chip from Cyrix or Advanced Micro Devices.

The $699 Presario 4212ES is being sold through Computer Discount Warehouse (CDW), a major PC reseller, as a special holiday bundle. The box alone is $699; with a monitor the system sells for $899. This model has also been sold to schools.

"It?s an excellent price point. "They'll keep hitting [the sub-$1,000 market] harder and harder," Sargent said.

By comparison, another Compaq model, the Cyrix-based Presario 2200, has been selling for $799 without a monitor and $999 with a monitor.

The 4212ES comes with a 166-MHz MMX Pentium processor, a 2.1GB hard drive, a CD-ROM drive, a built-in Ethernet network connection, 16MB of memory, a 14-inch monitor, and software bundle including Microsoft Works, Microsoft Bookshelf, and Microsoft Encarta for $899.

The system also boasts MPEG video playback technology and two Universal Serial Bus (USB) connections.

The 4212ES offers no ability to add extra options inside the box, however. "You get what you see. You buy the box and get what's in the box and that's it," said a CDW representative, alluding to the lack of internal expansion.

Options can be added externally by plugging them into the available ports. Like all PCs, the system comes with external connections such as serial and parallel ports as well as the USB ports. The USB connections allow hook up of consumer electronic products such as digital cameras.