Evesham Micro is set to introduce a #350 PC in the UK, sources said this week.
Evesham will achieve the low price by using an Intel compatible processor from Centaur/IDT - the first major European OEM win for the chipmaker.
That move is likely to force chip companies including AMD and Intel into cutting processor prices again and may force dealers into new price wars, as the budget PC market starts to take off in the UK.
Reports said that the Evesham machine will use the IDT/Centaur P200 Winchip, will come with 16Mbytes of relatively inexpensive EDO Dram memory, have a 1Gbyte hard drive and come equipped with a monitor.
The Winchip is an x.86 compatible processor, which IDT has just started to manufacture in volume. It is intended to run Windows applications and is priced at around $100 a part.
Mark Davison, processor product manager at distributor Datrontech UK, said: "The pricing does not surprise me. There will be a gunfight in the base end PC market. This will give all of our customers a run for their money."
Davison said that resellers and Datrontech customers had to make a careful decision about whether they wanted to fight it out in that market. "This is a signal there is going to be a fight in the retail market too," he said.
He said that at #350, spread over interest payments of 18 months, a PC could well become an impulse buy, attractive to a new base of consumers.
"It is not our policy to comment on competitors' products," said an Intel representative.