HP to hatch new entry-level business PC

Starting next Monday, the PC giant will begin shipping its $349 HP Compaq Business Desktop d220, a machine that should eventually replace its $399 HP Compaq Evo d310v.

HP will aim the lower price at small and medium-size businesses. Smaller businesses may buy fewer PCs each, but the market as a whole consumes a large number of PCs each year, analysts have said, making it a major target for PC makers like HP.

HP has also become much more aggressive on PC prices since it merged with Compaq Computer in May 2002. The merger touched off an ongoing market share battle with Dell Computer. HP already has a $349 desktop for consumers.

HP uses price to make the d220 desktop more appetizing to small business budgets. But the company arrives at the lower figure by carefully managing how it presents the machine. The d220 comes without a floppy drive, for example. But it offers a 2GHz Intel Celeron processor, which is faster than the Evo's 1.8GHz chip. The d220 also comes with 128MB of RAM, a 40GB hard drive, a keyboard and a mouse. Shipping charges are not included in the price.

HP's d220 is priced $50 less than the small business version of Dell's Dimension 2350, listed on Dell's Small and Medium Business Web site.

The Dimension comes with a 2.2GHz Celeron, 128MB of RAM, a 40GB hard drive, a CD-ROM drive, a keyboard and a mouse for $399, before shipping. That price also leaves out a floppy, now a common practice for business desktops, as well as eliminating a modem and speakers.

Dell ups its ante with a special offer, a $50 mail-in rebate, available on the Small Business site.

For comparison, IBM's ThinkCentre A30 desktop for small businesses starts at $469, before shipping. It includes a 2GHz Celeron chip, 128MB of RAM, a 40GB hard drive and a CD-ROM, along with a modem, speakers, a keyboard and a mouse.