HP does low-price PC limbo

Lowering the bar on the price of an entry-level PC, Hewlett-Packard on Tuesday introduced a line of build-to-order models that start at just $319 after a $50 rebate.

For that price, customers get a Compaq Presario S3000V desktop computer that includes a 2GHz Intel Celeron chip, 128MB of memory, a 40GB hard drive and a CD-ROM drive. What they don't get is a monitor, which is sold separately. "That's really the most aggressive thing I've seen," said IDC analyst Roger Kay. "That's a lean, mean price."

Other computer makers have been somewhat less aggressive on price. Gateway, for example, has moved to a pricing structure that includes monitor and shipping, with more powerful machines starting at $799. A Gateway machine for small businesses is listed at $599 without a monitor. Dell Computer has a model featured on its site for $599 including a 17-inch monitor, a free CD burner and free shipping.

The pricing is most likely to put the squeeze on low-cost specialist Emachines, which enjoyed strong sales growth at the end of last year, Kay said. Emachines' lowest-priced desktop model, the T2240, sells for $399 plus tax and shipping and does not include a monitor. HP's new model appears to be the lowest-priced Windows-based machine on the market, although still cheaper models running Linux are sold at Sam's Club, the members-only branch of retail giant Wal-Mart.

News source: C|net

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