IBM Cuts Computer Workstation Prices

International Business Machines Corp. on Tuesday slashed prices as much as 60% on computer workstations in an aggressive bid to win business in a hotly competitive market.

The world’s biggest computer maker also announced greater storage capacity and other enhancements for the RISC System-6000 computers, IBM’s leading family of workstations.

“Today’s announcements mean better value for our customers, enabling them to run their applications faster and more cost effectively,” said Jeff Mason, director of IBM’s advanced workstation business.

IBM’s move comes less than two months after Hewlett-Packard Co. announced a major series of introductions into the workstation market, which is quickly becoming one of the most highly contested areas of competition in computers.

Workstations are increasingly popular speedy desktop machines widely used by a range of businesses. But their appeal so far has been based largely on their sophisticated abilities, not price, which can range from several thousand dollars to more than $140,000.

The most striking example of IBM’s price reduction was a 60% drop in the RISC System-6000 Powerstation-Powerserver 550 model, which has 65 megabytes of memory. It dropped to $52,500 from $130,000.

In the 520 model, memory was doubled to 160 megabytes and the price was lowered to $21,500 from $22,330. The top-of-the-line model 950, which used to cost $146,640 and had a 32-megabyte memory, was dropped to $94,500 and the memory was doubled to 64 megabytes.

The magnitude of IBM’s price cuts suggested that the discounting that has permeated the personal computer business could spread to workstations as well.