September 22, 1998 2:40 PM PDT

Compaq's new lines for the fall

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Compaq Computer made its move for the fall selling season today with several additions to the Presario family of notebooks and desktops, including a sub-$1,000 PC for the education market.

The company is offering a Presario 2416ES model with a MII processor from

Compaq Presario 2412 ES
Compaq Presario 2412 ES
Cyrix for schools that is priced at $999, including a 14-inch monitor.

Compaq is also rolling out a notebook that is mainly aimed for use in the higher education market. The Presario 1235ES comes with a 266-MHz K6 processor from Advanced Micro Devices, a 12.1-inch dual scan display, and a 4GB hard disk drive for $1,749.

Low-cost PCs from companies like Compaq have been chipping away at Apple Computer's lead in the education market.

Compaq rolls out new desktops, notebooks
Market Computer Processor Hard drive Price
Consumer Desktops Presario 5150 350-MHz K6-2 8GB $1,299
Presario 5170 350-MHz PII 10GB $1,599
Education Desktops Presario 2412ES 300 MII 4GB $999 (1)(2)
Presario 2416ES 333-MHz K6-2 8GB $1,249
Consumer Notebook Presario 1235 266-MHz K6 4GB $1,699
Education Notebook Presario 1235ES 266-MHz K6 4GB $1,749
(1) Cyrix grades its MII chips according to a performance rating. Actual megahertz speeds are lower. (2) Includes 14-inch monitr. Source: Compaq

Compaq was second to Apple in school business in 1997, according to International Data Corporation. The Cupertino, California, company has seen its once-unassailable lead slip, according to analysts.

In the first quarter of 1998, Apple sold 138,460 systems, a decline of 30 percent over the same period in 1997, according to data from IDC. Compaq sold 147,241 units, an increase of 6.3 percent over the first quarter of 1997. In the second quarter, Compaq actually outsold Apple, although Apple still has a larger installed base of users.

Researchers say the changes are symptomatic of broader trends throughout the computing industry. Microsoft and PC manufacturers have been making steady inroads in a business that will approach $5 billion in revenue in 1998, according to market research firm Dataquest.

Compaq today also introduced new notebooks and mid-range desktops for the consumer market priced starting at $1,199, specifically targeting direct sellers Dell Computer and Gateway.

Compaq claimed that its new Presario 5150, which ships with a 350-MHz AMD K6-2 processor and 8GB hard drive, is priced 24 percent less than an equivalent model from Dell and 7 percent less than a system from Gateway, when factoring in the cost of shipping Dell or Gateway systems to a customer.

Also, Compaq's $1,199 price includes a $100 rebate that requires a customer sign on for 50 hours of free Internet access with a preferred service provider.

On many fronts, Compaq is responding to the threat from Dell. Dell has made tremendous sales gains in part due to the company's cost and operations efficiencies from its direct sales model. The company closed in on Compaq as the second-largest PC vendor in the U.S. in the second quarter shipments, although Compaq has a far stronger overseas presence.

 

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