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PC boxes, Pentium II prices shrink

Sub-$1,000 consumer PCs are coming in much smaller designs. Meanwhile, Intel is cutting the price on Pentium II chips.

New, compact, mimimalist designs for sub-$1,000 personal computers are emerging from major manufacturers. Meanwhile, Intel has cut the price on its Pentium II processor to spur low-cost Pentium II PC sales.

The price cuts affect the 233-MHz Pentium II processor which has been slashed from $401 to $268. "It is in effect today," said an Intel spokesperson. "There have been no other price cuts," he added. The next across-the-board price cuts are scheduled for February, he said.

Pricing for systems based on the 233-MHz Pentium II processor has dipped below $2,000 for some models from major manufacturers.

As prices for chips drop, consumer PC vendors are creating new minimalist designs to accommodate the burgeoning low-cost consumer PC market.

Recently introduced consumer PCs from Hewlett-Packard, Compaq, and others reveal a trend toward reduced size.

HP's 3100 is an $899 PC that comes with a 166-MHz Pentium MMX chip, 16MB of memory, a 2.0GB hard drive, and a CD-ROM drive. The unit itself is surprisingly compact and lightweight--the size of a slim VCR--much like Compaq?s Presario 2200, another sub-$1,000 PC.

Compaq, in addition to selling the small, black 2200, offers a $999 mini-tower enclosure system called the 4505 that comes with a 166-MHz Pentium MMX processor and a 2.1GB hard drive. The system weighs 15 pounds less than a typical full-sized tower system from Compaq and is almost three inches shorter and seven inches shallower.

These systems shed bulk primarily as a result having fewer expansion slots and drive bays inside--features that often go unused by consumers.

With the inside of the box requiring less open space for additions such as new hard drives, the case itself can be made smaller. Manufacturers save money both by reducing the number of components and the amount of material used to encase the PC's electronic "guts."

In a way, the new-look systems hark back to the original Apple Macintosh systems, which offered few expansion capabilities but came with all the components, also including a small black and white monitor, in one compact and relatively portable unit. The HP and Compaq systems have separate monitors, but Georgia-based Monorail offers an update on the all-in-one design, with a system that has an LCD display and the PC?s core components stored behind the monitor in a slim case.

Other recent innovations are the result of PC vendors trying to separate, rather than combine, functional units. For instance, components such as the CD-ROM and floppy drives--which need to be accessed frequently--are stored in a small cube or pizza-box-sized unit that is separate from the main system, as is the case with IBM's S-series Aptivas and some of NEC's Ready-series systems.

The downsizing trend seen in some sub-$1,000 PCs will likely show up in more consumer systems next year for another reason: The appearance of the "home server" device.

Many homes already have two PCs, and by next year there will be a greater array of gear that offers networking capabilities, including mobile phones, handheld PC companion devices, and digital TV set-top computers, which could offer a "pipe" (or conduit) to the Internet for the other devices in the house.

Without a home server, consumers would have to get an Internet account for each piece of hardware. But the home server will allow home users to streamline their communication links. Some Japanese companies are expected to start selling low cost home servers as soon as next year. (See related story)