February 14, 1997 11:45 AM PST

Digital joins PC price wars

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Digital Equipment (DEC) has joined the sub-$1,000 PC price club, hot on the heels of Compaq and Hewlett-Packard.

Digital's entry-level PCs will now be priced as low as $977, the company said.

Compaq triggered the price war at the beginning of this month when it instituted price cuts of up to 17 percent on desktops and 27 percent on notebook PCs. Hewlett-Packard, Compaq's arch rival, quickly followed suit by driving the price of its Pentium desktops to as low as $931.

Though fierce competition for corporate customers is the driving force behind the price slashing, Intel has also contributed its part. The chip maker recently pared the price of its "classic" non-MMX Pentium processors by as much as 34 percent. For instance, a 133-MHz Pentium plummeted in price from $204 to $134, while a 166-MHz classic version of the chip fell from $404 to $295.

So it is now Digital's turn to take a shot at Compaq and HP: the company is claiming that Pentium and Pentium Pro systems are now priced competitively with systems from its two competitors.

The estimated street price for the Digital Venturis FX with a 133-MHz Intel Pentium processor, a 1.2GB hard disk drive, and 16MB of memory is now $1,149. By comparison, a comparable HP system is $1,056 and a Compaq system is $1,150.

A Venturis GL equipped with a 180-MHz Pentium Pro processor, 16MB of memory, and a 1.2GB hard disk drive now sells for an estimated street price of $1,799. HP, by contrast, has a 180-MHz Pentium Pro system with an 8X CD-ROM drive for $1,827.

Digital said that part of the reason for this pricing action is to establish itself as a leader in Windows NT market. Last quarter, Digital delivered more than 15 percent of its desktop products with the Windows NT operating system installed, it said.

Along these lines, Digital announced substantial price reductions to the Celebris line of "network-ready" systems designed to drive Windows NT into medium and large enterprises. A Celebris GL system with a 180-MHz Pentium Pro processor, 16MB of memory, a 1.2GB hard disk drive, 3D graphics capability, a CD-ROM drive, and integrated Ethernet networking now sells for an estimated street price of $2,078.


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