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HP pushes low-cost business PCs

The computer maker will introduce a line of low-end corporate desktops at about the $1,000 price point, reflecting the latest dynamic of the PC retail market.

Hewlett-Packard (HWP) introduced a line of low-end corporate desktops today that will hit or come near the $1,000 price point, reflecting the latest dynamic of the PC retail market.

Three "refreshed" Vectra VE computers result from converging industry trends. First, since the advent of the Network Computer in 1996, vendors have been trying to devise cheaper, more manageable desktops. At the same time, decreases in processor and component prices have made it possible to sell sub-$1,000 Intel-based machines, a trend that has been well received by consumers.

Third, HP has been on a stated mission to increase its market share, and been relatively aggressive on pricing all year. The company already markets a sub-$1,000 computer for small businesses, and while these Vectras won't be the first sub-$1,000 computers for the corporate market, they will add to the choices in that segment.

The new Vectra VEs come with Pentium MMX processors running at 166 MHz, 200 MHz, and 233 MHz, and mark the moment when HP has finished phasing classic Pentium chips out of its corporate lineup.

A Vectra VE with a 166-MHz chip, 16MB of fast "SDRAM" memory, and a 1GB hard drive costs $999, without monitor, said Ken Bosley, product marketing manager for Vectra VEs.

For $1,092, businesses can get a 200-MHz model with a 2.1GB hard drive and 16MB of memory. The 233-MHz version costs $1,400, but comes with 32MB of memory.

Models with more memory and larger hard drives are also available. In addition, all machines will support the Universal Serial bus, a technology that makes peripheral devices such as external CD-ROM drives and printers "plug-and-play."

HP will again refresh the VE line in January, Bosley added. At that point, all VEs will come with a minimum of 32MB of memory and be available with the Windows NT operating system, which is oriented more toward networked business users than Windows 95.

Although targeted at traditional computer markets, the new machines all come complete with HP's TopTools software for managing PCs and will therefore compete with the other managed desktop offerings, Bosley said.

The new computers are also the first to feature the updated version of TopTools. New features include crash protection, which allows for easier application recovery in the event of a crash; resource monitoring, which IS managers use to monitor hard disk and memory capacity on individual computers; and remote virus alert. "We see a lot of interest in these $1,000 machines," he said. "In huge corporations, there is a very large base of old equipment in those places, especially terminals."

Matt Sargent, an analyst at Computer Intelligence said that few sub-$1,000 computers have been sold into the corporate market, although that could change as more major manufacturers target the price point.

Only 1.9 percent of the computers sold through the dealer channel in October fit that profile, he said. Most of those sales were based around the IBM PC 300 GL. (Dealers are generally considered the main conduit, besides mail order, of computers to medium to large businesses.)

Until now, corporate users have gravitated toward the $1,000 to $1,500 segment, which accounted for 46 percent of dealer sales in October. Leading computers in that segment included the Compaq Deskpro 2000 and Deskpro 4000. Although both the Deskpro 2000 and 4000 have been available in sub-$1,000 configurations since September, the most popular configurations have come in the $1,100 to $1,400 range, Sargent said.