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Sub-$1,000 PCs to get more power

Packard Bell will come out with two models running 200-MHz and 233-MHz Pentium MMX chips, the first appearance of more powerful processors in this segment.

Packard Bell NEC will throw down the price gauntlet this winter with the release of sub-$1,000 computers equipped with 200-MHz and 233-MHz Pentium MMX processors from Intel, 56-kbps modems, and other performance features.

The new computers, which will break current price-performance barriers, will come on the heels of price cuts by other vendors as well as news that archrival Compaq will release new sub-$1,000 Presarios based on AMD's K6 in January.

On December 15, Packard Bell will release a model with a 233-MHz Pentium MMX computer with 32MB of RAM, a 4.3GB hard drive, a CD-ROM drive, and a 56-kbps modem.

The new model will cost $1,099 and then be reduced to $999 in January. Packard Bell declined to comment on pricing or new products.

Another model will feature a 200-MHz Pentium MMX, 32MB of RAM, a 3.2GB hard drive, CD-ROM drive, and a 56-kbps modem. It will initially cost $899 and be cut to $799 in January.

As priced, these models would set new price-performance yardsticks for computers from major vendors. Many sub-$1,000 computers from top-tier PC makers use processors from AMD or Cyrix. Typically, only 166-MHz Pentium MMX chips from Intel make it into the sub-$1,000 category.

All of these computers typically have less memory, smaller hard drives, and slower modems than the planned Packard Bell models, and some come without CD-ROM drives.

The corollary to this is that the 200-MHz and 233-MHz Pentium MMX machines typically cost much more. Similarly configured 200-MHz machines are selling for $1,450 and up through computer retailer CDW.

A 233-MHz Pentium MMX machine with similar features goes for $1,700 and up. A Packard Bell 233-MHz Pentium MMX machine with a smaller hard drive and slower CD-ROM sells for over $1,400 through CompUSA.

"That is pretty good," said Kevin Hause, computer analyst at International Data Corporation on the alleged prices from Packard Bell.

These price cuts might be being fueled by processor discounts from Intel. Other analysts said last month that two large customers of the chipmaker were scheduled to receive discounts on Pentium II chips, as a result of a new volume discount to be rolled out in January. NEC, which is Packard Bell's parent company, is one of the largest Intel customers in the world.

Moreover, the MMX chips are scheduled to be phased out during 1998. The low-end chip from the company will become the Pentium II by the end of the year, Intel executives said at a separate event.

Because of this, heavy discounts on the MMX chips now to a loyal PC maker are not inconceivable, mused Hause. "It wouldn't surprise me that Intel is being very aggressive, especially to fend off competition in the low end."