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Emachines unveils more sub-$600 PCs

The low-cost PC leader steps up its assault on the well-established computer makers, releasing three new models.

Low-cost leader Emachines has released three new sub-$600 PCs as it continues its quest to gain market share at the expense of Compaq, IBM, and Hewlett-Packard.

Emachines also said today that production of personal computers in the second quarter of this year jumped to 400,000 units after surging to 300,000 boxes in the first quarter. It only shipped about 150,000 computer in the fourth quarter of 1998 when it entered the market.

With rebates, Emachines is offering two $599 models with fast Intel Celeron processors and DVD drives and two other models at $499 and $399 with chips from National Semiconductor's Cyrix arm.

The company claims that it is now offering features comparable to PCs selling for over $1,500 only six months ago.

The eTower 366id comes with a 366-MHz Intel Celeron processor and a "5X" generation DVD drive. It is priced at $599 after a $75 rebate. It also includes a 4.3 GB hard drive, an ATI Technologies graphics chip, a 56-kbps modem, Microsoft Windows 98, and Microsoft Works.

The eTower 400i, priced at $599 (after rebate), packs a slightly speedier Celeron 400-MHz processor, a 4.3 GB hard drive, and a CD-ROM drive--instead of the DVD drive in the 366id model.

The eTower 366c uses a Cyrix chip, includes a CD-ROM drive, and has other features similar to the Intel-based models. This is priced at $499. For $399, the model 333cs uses a slightly slower Cyrix chip and includes a 2.1 GB hard drive.

The meteoric rise of the upstart, ultra-low-cost PC maker indicates it has struck a chord with PC buyers, though analysts are still watching closely to see how profitable the company can be.

It has shot up from virtually nowhere to become the fourth-largest PC supplier in the retail market, passing such established players as Packard Bell NEC and coming within one percentage point of IBM. The company claimed 9.9 percent of the market last month, according to PC Data's February 1999 report.

This has happened in only about four months. Last November, Emachines had no market share to speak of and was virtually unknown.

Stephen A. Dukker, chief executive of Emachines, said that it intends to ship between 1.7 million and 2 million boxes in 1999 and aims at a 10-percent gross profit margin on sales. The company has also said it intends to go public at either the end of this year or early next year.

To boost volume, Emachines also plans to enter the Chinese market later this year, according to Dukker. He expects the Asian country to generate an additional 1 million sales.

Emachines PCs are found at retailers such as Circuit City, Staples, and online resellers such as Computer Discount Warehouse.

New competition had cropped up recently, however, from companies like Microworkz, DirectWeb, and Gobi.

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