Compaq to Cut Prices on PC Lines : Computers: The move could set off a price war during the industry’s peak buying season.
Compaq Computer Corp., which earlier this year took over as the nation’s largest personal computer company, announced sweeping price cuts Monday on a wide range of products, a move that may trigger a price war.
The price reductions coincided with the start of the strong computer buying season, which runs from September to December.
The Houston-based company slashed prices up to 22% for virtually its entire line of Deskpro XL, Deskpro XE and ProLinea personal computers.
It also lowered prices up to 17% on most of its Contura and Contura Aero products.
There was concern that Compaq might be fueling a price war in the PC business, with the reductions coming at a time when prices for some components have declined and inventories have risen.
“My gut feeling is that some vendors will react and some will not. It depends on their overall strategy,” said John Carlo Bisone, Compaq’s senior vice president of North American marketing.
“The main point of this action is to combine affordability with availability,” he said.
At the same time, Compaq said it is meeting demand for most of its product lines, with the exception of some models of its notebook computers.
“In the past, customers sometimes could not find the Compaq desktop configurations or the quantities they really needed. Now that issue is, for the most part, solved--and at a more affordable price,” said Ross Cooley, Compaq’s senior vice president for North America.
The company has had problems in the past few quarters meeting demand for its products.
“We are pretty much current across the product line,” Bisone said, adding that the company’s price cuts are “not a fire sale” but an effort to continue to gain market share in the PC industry.
On Monday, San Jose-based market researcher Dataquest Inc. said Compaq is again the biggest U.S. maker of personal computers.
Compaq stock closed up 25 cents at $35.125 Monday on the New York Stock Exchange.
