HP will slash Vectra PC prices
PC Week Online (July 9, 1997) - On your mark, get set, go cut prices.
Hewlett-Packard Co., seeking to pre-empt expected price cuts from arch-
rival Compaq Computer Corp. and be more competitive with Dell Computer
Corp., will officially announce next Monday across-the-board price cuts
on Vectra PCs.
HP will reduce prices on Vectra PCs by as much as 25 percent, including
one model with a 233MHz Pentium II processor, a 2.5GB hard drive and
32MB of RAM that will now be sold for $2,040.
A Vectra with a 266MHz Pentium II and a 24-speed CD-ROM drive will be
cut by about 10 percent to $2,767.
Meanwhile, a Vectra PC with a 233MHz Pentium Processor with MMX
Technology will be priced at $1,590, roughly a 20 percent drop.
By comparison, a Dell Optiplex GXi with the same processor is being
advertised this week for $2,899. However, that system includes a 16-
speed CD-ROM drive, a 17-inch monitor and a 10/100M-bps Ethernet card.
At the entry level, an HP system with a 200MHz non-MMX Pentium, a 2.5GB
hard drive and 32MB of RAM will drop to $1,480, while a 166MHz non-MMX
system with 16MB of RAM and a 1.6GB hard drive will be priced at
$1,020, representing a 10 percent price cut.
HP Vectra prices do not include a monitor.
In New York tomorrow, Compaq will unveil its Deskpro 2000 and 4000
desktops, which will be the first PCs sold under its channel
configuration program.
Officials claim channel configuration will help reduce purchase prices
by letting them sidestep finished goods inventory pileup and more
accurately predict desired configurations.
Compaq, HP and IBM Personal Computer Co. are all modifying their
distribution strategies to more effectively compete with the prices of
direct marketer Dell.
HP's cuts, which were described to reporters and analysts today--the
day before Compaq's announcement--will take effect Monday. It marks one
of the few times HP, of Palo Alto, Calif., has announced price
reductions before market leader Compaq.
HP officials said additional short-term price cuts are not out of the
question, although they doubted they will be forced by Dell to come
down further.
HP's marketing manager Emilio Ghilardi said the company was able to
take advantage of steep price cuts on Intel Corp. processors, a
reduction in finished goods inventory and a streamlined supply chain.
By Lisa DiCarlo
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