K6-2/300 HP's PC outsold iMAC in Aug.,HP offers K6-2/366 Pavillion 6360,CPQ will ship K6-2/400 this fall
HP angles for No. 1 at home
By Jim Davis
Staff Writer, CNET News.com
October 20, 1998, 12:55 p.m. PT
Hewlett-Packard released three new consumer
PCs today in its bid to overthrow Compaq as the
king of the retail PC market.
The new arrivals include a 333-MHz Intel Celeron
system for $899 and another based on a yet-to-be
released 366-MHz K6-2, according to HP.
Strong holiday season sales could vault HP into a
position to drive past
Compaq, the current
leader of the home PC
market. Year-to-date
numbers from Audits &
Surveys Worldwide and
PC Data, among others,
place HP as the No. 2
vendor in the home
market, which is primarily characterized by sales
through retail stores and consumer electronics
superstores.
Some analysts are now quietly predicting HP could
overthrow Compaq as the leader in the retail
market by year's end. Although HP has a smaller
market share, its sales are growing at double the
rate of Compaq's. It was just July 1997 when
Compaq took over the No. 1 retail spot from
then-leader Packard Bell, according to results from
PC Data.
HP also had the top-selling computer for the month
of August, a unit with Advanced Micro Device's
K6-2 at 300 MHz that outsold Apple's iMac for
the month.
"In terms of consumer awareness, HP has a good
name. [That,] combined with the right
configurations and price points [means] HP is
starting to entice consumers more and more," said
Cameron Duncan, an analyst with research firm
ARS.
HP said it is now
offering the Pavilion
6355, which features a
333-MHz Celeron
processor and 64MB of
memory, for $899, along
with the Pavilion 6360,
which has a 366-MHz
K6-2. A system with a
350-MHz Pentium II,
100-MHz system bus,
and 96MB of memory is
priced at $1,299.
Compaq, meanwhile,
will counter with
400-MHz K6-2 systems
later this fall.
One of the factors that has led to HP's tremendous
growth in the consumer market is its ability to
extend the popularity of its printer products by
bundling them with its own system, analysts say.
"For their entry-level systems, consumers may have
the perception that HP products work better with
other HP products," Duncan noted. Compaq did
not have its own branded printer line until May.
HP will continue to press on with its bundling deals
with a mail-in rebate program that will offer a total
of $150 back when consumers purchase a PC,
monitor, and printer from HP, according to ARS.
Another factor in the company's success: HP has
ridden the crest of market acceptance for AMD's
processors. HP's research has shown consumers
are buying processors by their clock-speed rating,
and not by brand, a company spokesperson said.
AMD chips cost about 25 percent less than Intel
chips running at the same speed. Consequently, HP
has been able to offer faster systems with AMD
chips at prices comparable to Intel-based
consumer models.
"AMD products are bringing lot of value to table
for them, and they are exploiting those real well,"
said Steve Baker, senior hardware analyst for PC
Data. "While people tend to think of HP as
higher-priced item, their average selling prices have
been at or below that of Compaq in the last 8 to 10
months," he noted. Compaq has also adopted the
AMD processors, but, as Baker points out, HP is
eking out an edge in pricing.
HP's sales are up 99 percent year-to-date
compared to the same period last year, while
Compaq is up 47.4 percent, according to Baker.
Compaq still has the overall lead with 29 percent
market share, and HP is second with 18.4 percent.
PC Data measures sales at catalog and retail sales
operations.
HP's lowest price offering is still the Pavilion 6330,
an AMD-based offering costing $799, with the
Celeron-based 6355 filling in the spot above that,
and two more AMD-based systems above that.
The Pavilion 6360 represents a slight upward trend
in pricing for an AMD product which Duncan
expects will continue as AMD continues to ramp
up processor speeds in the coming months.
The 6360 with its 366-MHz K6-2, the fastest
AMD chip to date, is a chip not even yet
announced. As previously reported, AMD will
soon start offering a 380- and 400-MHz chip to
place it squarely in competition with Intel's Pentium
II chips.
Compaq, in fact, is expected to be among the first
to use those faster chips. In early November,
industry sources say the company will roll out a
new Presario for consumers with the 400-MHz
AMD K6-2 processor, 128MB of memory, and a
DVD-ROM drive at a price of between $1,649
and $1,699, although that could change by
introduction. |
