Compaq slashes Xmas PC prices

Compaq has cut PC pricing across lines by up to 46 per cent as it bids to be vendor of choice for the SoHo market Christmas rush. In an aggressive move targeted at direct sales rivals, an extra 10 per cent discount will be available until the end of 1996.

Compaq has cut PC pricing across lines by up to 46 per cent as it bids to be vendor of choice for the SoHo market Christmas rush. In an aggressive move targeted at direct sales rivals, an extra 10 per cent discount will be available until the end of 1996.

The entry-level 120MHz Pentium-based Deskpro 2000 5120 with 16Mb RAM, 256Kb cache, 1.08Gb hard drive, and 14-inch monitor falls 29 per cent from £1,420 to £1,010 (TBP) and with the promotional pricing falls to £899. The cuts also cover notebooks and servers as well as desktops. Compaq memory prices have also been cut by up to 56 per cent with 16Mb EDO RAM down to £145 from £290.

Compaq said that the promotional pricing is designed to combat invidious comparisons with direct vendor pricing. "Compaq has previously quoted a typical buying price, which can often be ten per cent more than users expect to pay, making it look expensive in comparison to other vendors," said Peter Blampied, marketing manager at Compaq. "[Promotional pricing] is designed to make small business users aware that they can purchase a Compaq PC for no more than the cost of an equivalent PC from tier two and three vendors."

Compaq will back up the price cuts with advertising that stresses real-world price comparisons.

Compaq can be contacted by telephone on 0181-332 3000.

PCDN Comment: This is a very aggressive move on Compaq's part, showing it means business at Christmas after an uncomfortable summer where direct rivals vastly undercut the market leader by passing on savings caused by the collapse of memory pricing. Realistic pricing has long been a problem for companies that sell through the channel. About five years ago, Compaq sued Dell over misleading advertising that compared Compaq RRPs with Dell's direct pricing: Compaq's street prices were often 30 per cent lower than the list prices. TBPs only go part of the way to solving that problem as they have to err on the side of caution in order not to embarrass resellers.

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