Toshiba to Cut Prices, Unveil a Pen Computer : Technology: The move comes after IBM and Compaq announce reductions in what they charge for their products.

Responding to increased competition, Toshiba America Information Systems Inc. will announce today that it is cutting prices on some of its portable computers by 14% to 25%.

The company will also introduce a pen computer that is lighter than any full-size tablet computer in the market, that uses a battery 20% more powerful than regular nickel-cadmium batteries and that can be used both indoors and outdoors.

In the last month, Toshiba’s competitors--International Business Machines Corp. and Compaq Computer Corp.--have slashed suggested retail prices on their portable models by up to 25%.

“IBM and Compaq have reduced their dealer discount percentages and, as a result, the difference between the street price and the suggested retail price has narrowed and this cuts into the profits of the retailers,” said Steve J. Lair, Toshiba’s vice president of marketing.

Lair said Toshiba has maintained the discount percentages it offers its dealers, allowing them to retain their profit margins. The dealer discount percentage is the wholesale price dealers pay, which is lower than the manufacturers’ suggested retail price.

The new suggested list price of Toshiba’s portable computer T4400SX/120, for example, is $2,999--a $1,000 reduction beginning today.

Toshiba officials said the Irvine-based company’s new pen computer, called Dynapad, will hit the market in January. Such computers contain special software that can recognize neatly printed handwriting.

The 3.3-pound machine is considerably lighter than many competitors’ machines. Its black-and-white screen uses a back light, which will allow customers to use the computer in difficult lighting situations. The machine is powered by a nickel-hydride battery, which the company said is 20% more efficient than the regular nickel-cadmium battery.

“Over the last year, Toshiba has tried to erase the image of being expensive, and they’ve been doing a credible job of it,” said Bruce Stephen, director of personal computer hardware research at International Data Corp. of Framingham, Mass. “This latest price cut is putting it up another notch,”

Regarding Toshiba’s entry into pen computers during a slump, Stephen said that it is a good strategy “to establish a good distribution channel, learn more about the customers and how they use the products in the market.”