HP Hopes to Gain Ground With Cheap PCs

Dell on Wednesday was starting its Inspiron 1200 at $499 after a $50 instant discount, but before shipping charges. The machine comes with a 14-inch display, Intel Celeron M 360 processor, 256MB of RAM, a 40GB hard drive and a combination CD-burner DVD-ROM drive.

HPs Compaq Presario V2000 and M2000Z notebooks, which offer an Intel Celeron M 360 processor paired with a 14-inch widescreen display or an AMD Sempron 2800+ and 15-inch display, respectively, start at $529 after rebates and before shipping. When configured to match the Dell system, they came to $579.

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HP is also targeting retail, where the company says about half its consumer customers buy their PCs, with aggressive prices.

Customers "may shop online…but when they walk into the store, they can [make a purchase and] take it home immediately and they really value that," Szteinbaum said.

HPs new retail lineup, includes Compaq Presario desktops for less than $400 after rebates, and an HP Pavilion a1200n line the include Windows XP Media Center Edition software and dual-core processors on some models.

The companys $359 Compaq Presario is its SR1610NX. It offers a 1.8GHz AMD Sempron 3200+ processor, 256MB of RAM, an 80GB hard drive, a combination CD-burner, DVD-ROM and a memory card reader. The machine rivals Gateways new eMachines T3104 desktop, which costs slightly less, offering a Sempron 3100+ and a 100GB hard drive for $339 after a $50 rebate.

The HPs Pavilion a1250n, for one, offers a dual-core AMD Athlon 64 X2, which includes a pair of 2GHz processor cores, along with 1GB of RAM, a 250GB hard drive, twin DVD-burner and DVD-ROM drives, a memory card reader and Windows XP Media Center Edition. The machine sells for $849 after a $50 mail-in rebate from HP.

The new Pavilion rivals machines such as Gateways GT5014 Media Center desktop, whose hardware and software are similar, aside from offering a dual-core Intel Pentium D 820 processor and a TV tuner card that allows it to record television programs. It sells for $899 at stores such as Best Buy.

Ultimately, "Were not trying to start a price war or trying to take prices irrationally low," Szteinbaum said. However, "These are prices we believe we can sustain and can sustain profitably."

Thus, assuming variables such as energy prices dont interfere, a $250 PC is here to stay from HP.

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