IBM cuts desktop prices

Following close on Compaq Computer Corp.'s heels, IBM Corp.

Following close on Compaq Computer Corp.'s heels, IBM Corp. on Thursday announced price cuts across its desktop lines, bringing the price of a Pentium II-based machine near the sub-$1,000 mark.

The cuts announced today range up to 20 percent for the Pentium II-based systems, and up to 13 percent for MMX-based systems.

PC price wars

More price cuts from Compaq.

A 300GL machine, with a 233MHz Pentium II processor, 16 MB of SDRAM, and 2.5GB hard drive, now starts at $1,099. IBM (IBM) also lowered prices on its General Business Series monitors by as much as 14 percent.

Compaq formally announced its price cuts Wednesday, although they had been rumored for a week or so. Those cuts follow the company's announcement that it would miss earnings expectations for the quarter.

Thursday, IBM said its cuts are a result of cost efficiencies achieved under its Advanced Fulfillment Initiative, a plan designed to boost performance in product design, parts procurement, forecasting, assembly, and delivery.

But IBM did take a swipe at Compaq in its announcement, with Rod Adkins, general manager of the Desktop Systems group, saying, "Unlike companies cutting prices only on older systems, IBM is also offering significant savings on our hottest-selling Pentium II-based models."


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