Compaq's sweeping price cuts are not the start of a price war as rivals, including IBM, said they would not respond in kind, while accusing the firm of running a stock clearance sale.
Last week PC Dealer revealed that Compaq would slash prices, but the vendor has made even deeper cuts than sources had expected with reductions reaching 59 per cent in some cases.
The price promotion will run until 31 December backed by a series of national newspaper ads. It's been put together in conjunction with resellers Tplc, Byte, P&P, ITE and DNCS. Despite accusations of stock dumping, Compaq said it will not place any volume requirements on resellers taking advantage of the promotion.
Compaq marketing manager Peter Blampied said the promotion was a natural progression from the 'Costs You Less' campaign that ran earlier this year.
'By reducing the purchase price of our PCs we are enabling the small and medium-sized business user to make savings in the short term as in the long term.
'We've been saying that Compaq kit costs less than cheaper computers and now we're saying here's a cheaper computer as well.'
Toshiba's UK PC product marketing manager Murray McKerlie said he did not expect a price war to break out. 'Some of the price cuts, particularly on notebooks, are fairly run of the mill. Others look like Compaq has decided to clear its decks of existing stock in preparation for new product.
This is not the start of a price war, just the usual round of November cuts.'
The entry-level Compaq Deskpro 2000 - with P120 processor, 16Mb Ram, 1.08Gb hard drive, 256K cache and 14in monitor - has been reduced in price by 29 per cent, from u1,420 to u1,010. The special price promotion will mean the price falls by an additional 11 per cent to u899.
Neil Hamilton, channel marketing manager for Texas Instruments, said: 'For a while Compaq has been very focused on the high-end of the market and have moved away from the volume end. Now it looks like they've decided to come back to it.'
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