Toshiba America Joins Computer Maker Price Wars

Exchanging volley for volley in the computer price wars, Toshiba America cut prices on 10 of its lightweight notebook computer models Tuesday by as much as 24%.

The cutbacks came a day after Compaq Computer Corp., a struggling competitor in Houston, announced a broad series of price cuts of up to 25% on its personal computers.

And the price cuts follow those made about two weeks ago by competitor AST Research Inc. in Irvine, which cut prices 30% on two lines of notebook computers--those small enough to fit inside a briefcase.

“This industry has gone nutso on price cuts,” said JoAnne Stahel, a computer retail analyst who owns a research company in Plano, Tex. “Toshiba and Compaq really needed to take this step” to stave off competition from such so-called clone-makers as AST.

Toshiba America, a subsidiary of Tokyo-based Toshiba Corp., did not cut prices on two models introduced in October. Grant Johnson, a product manager at Toshiba, said strategy demonstrates that Toshiba still believes that it can make profits by selling products based on technological leadership, despite concerns from industry analysts that price cuts could cause big industry losses.

The cutbacks on prices of older Toshiba models are the second major round of price rollbacks this year. Many models now cost less than $3,000, or about half to one-third the price a year ago, Stahel said.

Although its prices are still higher than some clone-makers’ machines, Toshiba is being driven by fierce industry competition to reduce prices rather than rely on the technical sophistication of its machines to command a price premium, Stahel said.

Michael Winkler, the recently appointed general manager of Toshiba’s Computer Systems Division in Irvine, said the price reductions will help protect Toshiba’s No. 1 market share position in the $1.4-billion notebook computer market.