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HP cuts prices amid PC rebound

Hewlett-Packard announces it is cutting prices immediately on its leading business PC lines by up to 21 percent.

Hewlett-Packard announced today it is cutting prices immediately on its leading business PC lines by up to 21 percent.

The discounts apply to the small-business Brio line, the Vectra line of corporate PCs and high-end Kayak workstations, all of which run on Intel chips. The move could help solidify HP's momentum in the PC market.

A recent report by International Data Corp. concluded that while Compaq and Dell still lead in overall PC sales worldwide, HP is gaining ground at a fast clip. Among large manufacturers, HP overtook Dell as the fastest-growing big PC maker, with shipments for the first quarter of 2000 growing by 67 percent domestically and by 56 percent worldwide. Right now, only Emachines, which sells solely in the consumer market and is a much smaller company, is growing faster than HP.

Part of the resurgence has occurred in the consumer market. February figures from PC Data showed HP claiming 42 percent of the U.S. retail PC market, compared with 32.6 percent for Compaq Computer, once the perennial leader in retail.

The price cuts, which vary according to configuration, break down as follows: Prices for Kayak workstations, currently priced from $1,579 to $3,795, will drop as much as 21 percent. Vectra corporate PCs, currently priced between $799 and $2,579, will be reduced by as much as 15 percent. Brio small-business PCs, currently priced between $549 and $1,385, will drop as much as 13 percent.

HP's price cuts follow discounts on processors from Intel and AMD. Although both chipmakers continue to cut prices, they are not lowering prices as much as they did last year due to an ongoing processor shortage.

News.com's Michael Kanellos contributed to this report.