Packard Bell NEC to Sell $699 Home PC Based on Cyrix Chip
In a move that could touch off a new round of price cuts for full-featured personal computers, Packard Bell NEC plans to unveil today a line of PCs priced from $699.
The move would follow last week’s announcement of an alliance with Cyrix, a subsidiary of National Semiconductor, to produce microprocessors for Packard Bell NEC’s consumer PCs.
The $699 unit, which does not include a monitor, is based on the low-cost 233-megahertz Cyrix MediaGX microprocessor. It will offer a combination of performance, storage, peripherals and other features that would generally place a name-brand computer in the $800-to-$1,000 price range. Cyrix chips are priced much lower than Intel products running at comparable speeds.
“This is not a new price barrier per se,” said Matt Sargent of San Diego-based ZD Market Intelligence. He noted that a number of major vendors, including Hewlett-Packard and Compaq Computer, have had similarly low prices on machines based on older processors or overstocked models. The Packard Bell NEC product, however, is based on Cyrix’s newest processor designed for the lowest-cost PCs.
“It could tip off a new round of price wars” for machines based on new technology and sold by major companies, Sargent said. “Prices came down very dramatically until January of this year but have been pretty stable since then.”
James Staten, an analyst with Dataquest in San Jose, predicted that other major vendors, such as Compaq and HP, will match the $699 price soon. Those offerings may include machines based on Intel’s new Celeron processor.
Even cheaper PCs are on the way, Staten said. “Cyrix would like to push down to as low as even $500 [for a full-featured PC] by Christmas,” he said. “They’re looking for a price point that no one else can touch.”
The new units reflect Packard Bell NEC’s strategy to build up its low-cost line and push PCs into more households as a means of stemming its market share slide. The privately held Sacramento-based company was formed from the 1996 merger of Packard Bell and NEC.
