The world's two largest PC makers, Compaq and Dell Computer, have cut prices on some of their desktop machines and workstations.
Compaq has slashed the price of most of its desktops by up to 13 per cent, while rival Dell has dropped prices by up to 17 per cent on its Precision Workstations.
Compaq said it has cut the cost of its older models to make way for nine new releases based on Intel Celeron chips running at either 466MHz or 500MHz clock speeds or Intel Pentium III processors running at 550MHz or 600MHz. The systems will ship this month starting at $989.
Older models will cost from $849 for a Deskpro EP Series based on an Intel Celeron processor running at 466MHz.
Dell cut the cost of its Precision Workstations by up to 17 per cent. A Precision Workstation 210 running Windows NT and based on a 650MHz Pentium III processor costs $1,740.
Dell also reduced the price of its mid-range Precision Workstation 410 by up to 15.5 per cent, with prices starting at $1,423.
Rob Enderle, an analyst at researcher Giga Information Group, said the market is saturated and that Compaq and Dell are lowering prices to boost sales. "But the first quarter will still be tough to get sales numbers back up," he said.
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