TECHNOLOGY : Compaq Trims Computer Prices To Spur Sales

Compaq Computer Corp. on Tuesday slashed prices as much as 34% on its personal computers, offering yet another sign that the recession and renewed competition are sparking one of the fiercest PC price wars ever.

Compaq said it would also drop prices on optional equipment, including memory storage units and modems, by as much as 68% to spur sales and increase its stagnant share of the PC market.

Analysts and industry sources said Compaq’s move underscores not only the severity of the ongoing recession, but--more important--customers’ increasing demand for lower cost computers. “The PC is a commodity now, and price is really the major issue with most buyers,” said a spokesman for Businessland, the nation’s largest corporate retailer.

As examples of its new retail prices, Compaq said that the price of the new laptop model LTE 386s/20 Model 30 will be cut to $4,399 from $6,499, and that the Model 60 would be slashed to $4,799 from $6,999.

Douglas Johns, Compaq’s vice president of worldwide corporate marketing, said the price cuts are aimed at winning customers who have been put off by the company’s traditional premium pricing, considered among the highest in the PC industry.

“Customers told us affordability was a key barrier to their not buying our products,” Johns said. “So we’re moving this significant barrier.”