TECHNOLOGY - Aug. 17, 1995

Compaq Cuts Prices, Unveils New Pentium Models: The world’s leading maker of personal computers fired the first salvo in a new industry price war, cutting prices by up to 25%. Compaq Computer Corp. also unleashed a new line of Pentium-based commercial desktop models, nine of them based on Intel Corp.’s new 133-megahertz Pentium chip, reasserting its leadership position. “These are aggressive pricing actions,” said Richard Zwetchkenbaum, a research director at International Data Corp.. “I would expect IBM, HP, Digital and other commercial desktop vendors, including Dell, are going to have to respond and will respond.” Industry experts expect a new wave of PC purchases after Microsoft Corp. releases its Windows 95 operating system next Thursday. The new system demands more memory and power than many PCs currently have. Montgomery Securities projects at least 17 million PC owners will buy Windows 95 upgrades or new PCs within the first 18 months of the software’s release. In response, Compaq will begin offering as standard in its commercial desktop models a 630-megabyte hard drive.