System builders and rival manufacturers have come under pressure to compete against Compaq's deal which gives away monitors with its Prolinea and Deskpro ranges - a move likely to wreak havoc in the competitive PC market.
According to sources, Compaq has organised the special offer in reaction to price discounting from AST. One rival claimed the firm is trying to get rid of a glut of 14in monitors after shortage scares last year prompted the PC manufacturer to invest heavily.
One Compaq dealer was annoyed by the deal, saying: 'Direct dealers are being forced to use distribution because the deal is only available through distributors so why are they favouring them over us?'
Steve Jackson, desktop products marketing manager at Compaq, denied the move was a reaction to AST or Dell. 'If it goes well it's likely we'll extend it and look at other promotional activity. We aren't necessarily cutting our prices', he said. But he acknowledged that the free monitor represented a discount of about 20 per cent. Compaq is claiming each monitor is worth around u230.
Rival PC vendor IBM stated that it has remained committed to the delivery of value but will not bundle monitors with PCs as it wants to keep its channel ordering processes simple.
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