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Sun says uncle on pricing

Under pressure from competitors with Intel-based machines, Sun cuts prices on its UltraComputing line.

In a tacit acknowledgement of increased competition in the workstation market from Intel-based machines, Sun Microsystems (SUNW) today cut prices on its UltraComputing workstations.

Sales numbers suggest Sun will have to fight hard to maintain market share as companies like Compaq Computer focus on the workstation market and help drive down prices.

Preliminary numbers from market research firm Dataquest show that though the overall market is down this quarter, Sun has declined even further than the average in terms of both units shipped and revenue.

"Sun has been losing share on entry level models, though Ultra based systems have been growing pretty well since their introduction," said Dataquest analyst Peter ffoulkes. "Basically, Sun has recognized the threat of the Wintel workstation and they are definitely positioning themselves to prevent any defections...This is a sensible market move to consolidate their position," added ffoulkes.

New pricing for an Ultra 1 model 140 and TurboGX graphics will now start at $7,995. Sun promises that counting in discounts for volume purchases, it can match Intel-processor-based Windows NT workstations "price for price."

Sun has also upgraded its entry-level workstations to make them more competitive. The new Ultra 1 model 140 Creator 3D now includes a 17-inch monitor, 64MB of memory, and 2GB hard drive for $13,995. Customers who buy in volume, however, will pay less than $10,000, Sun said.

The company has also instituted price reductions of up to 38 percent on its UltraEnterprise workgroup servers while offering double the standard level of memory in many configurations. An entry-level model with 143-MHz UltraSparc RISC processor, 64MB of memory, and a 2GB hard drive will now ship for $7,495.

Ultra Enterprise 2 and Enterprise 150 servers are all bundled with the Solstice SyMon system management tool, while Ultra workstations will come with the Solaris Internet Access PlusPack bundles at no charge.