IBM Cuts More Computer Prices; Rivals Unveil Units

International Business Machines Corp. on Monday cut prices on many of its personal computers, following reductions on other models last month. The cuts are part of an industry trend that is prompted by the recession and increasing competition.

Separately, NCR Corp. introduced its first portable computer, Zenith Data Systems unveiled what it calls the world’s most powerful laptop model and Hewlett-Packard Co. added to its fast-expanding computer workstation line.

Analysts said the price reductions by IBM and other PC manufacturers are hurting profit margins at computer makers and computer retail stores alike. But they signal an opportune time for computer buyers.

Personal computer prices typically drop by 15% to 20% a year even without a soft market because of the continual decline in the cost of computer components, said Rick Martin of Prudential Securities Inc.

What is notable about the recent price cuts is they have not always coincided with their own new-product announcements, as is usually the case.

“A soft economy is forcing them to take cuts before the products are ready,” Martin said.

For example, he said, the price cuts announced by IBM include the low end of its personal computer line. IBM is not expected to unveil replacements for these models until next month.

In recent weeks, price cuts have been announced by Compaq Computer Corp., Zenith Data Systems, Dell Computer Corp., AST Research Corp. and Toshiba Corp.

IBM’s price cuts range from 6% to 24% and affect 13 of its PS-2 models. On April 23, the world’s largest computer maker reduced prices on other members of the PS-2 line by up to 38%.

IBM said the cuts were prompted by the recession and competition.

Of the new models, NCR’s portable weighs only 5.6 pounds and measures 8.3 by 11.6 inches, putting it in the increasingly popular “notebook” category of laptops.

The model is powered by Intel Corp.’s 386SX microprocessor. The IBM-compatible computer will start at $3,995 and have a 30-megabyte hard drive and floppy disk drive. A model with a 60-megabyte hard drive for greater storage will sell for $4,395. Both should be available next month.

Zenith Data Systems announced five portable computers and two larger personal computers.

Zenith unveiled a laptop it says is the first to use Intel’s top-of-the-line 486 microprocessor, making it the most powerful laptop on the market.

The unit includes a huge, 120-megabyte hard disk. The model, designed for programs that do a lot of number crunching, will sell for $8,899 when it is available this fall.

Zenith also introduced a laptop based on Intel’s less costly 486SX microprocessor and one that uses the 386SL processor, which is designed to conserve batteries. It says the 386SL model will run up to eight hours on one recharge.

Hewlett-Packard extended its workstation line with three models, all powered by Motorola microprocessors.

One is a low-cost model aimed at commercial users moving up to workstations. The other two are aimed at engineers.