Widespread cost cuts spur portables market

The notebook computer market is taking on new life in the 1997 buying season with a slew of price cuts by major vendors both on high-end systems positioned as desktop replacements and on low-end systems running older Intel Corp. chips.

In a two-week period Acer America Corp. Compaq Computer Corp. Dell Computer Corp. and Toshiba America Information Systems Inc. announced price cuts on a variety of bundles as well as a number of special promotions for the federal market that run through the end of fiscal 1997.

Now for less than $3 000 federal shoppers can find midrange notebooks with at least a 150 MHz Pentium processor 16M of memory 1.2G or more of storage and a CD-ROM drive.

"There is significant competition for the government end user wanting to buy Tier One brand-name manufacturers' products but still requiring best value " said Mike Mellon area sales manager federal sales for Toshiba. "The tier-one competitors are competing for that business."

Unlike last summer when a shortage of active-matrix TFT displays made it difficult to order some notebooks vendors said they expect no significant supply problems.

Dell plans to target the federal market with a popular configuration of its Latitude notebook specially priced at $2 499. At this price point an agency customer can buy it using an International Merchant Purchasing Authorization Card which has a $2 500 threshold. Dell expects to have the special promotion approved by the beginning of this week.

The Latitude LM comes with a 133 MHz Pentium with MMX chip a 1.6G hard drive 16M of RAM a 12X variable CD-ROM drive a 12.1-inch SVGA active-matrix display Microsoft Corp.'s Office-Small Business Edition and a one-year standard warranty.

Additionally Dell will be offering nearly $200 off General Services Administration pricing on four additional portable models said Rocky Mountain group segment marketing manager with Dell Federal Marketing.

Acer reduced prices by about 10 percent for several models in its midrange Extensa 600 and high-end TravelMate 7000 Series notebooks. The Extensa 610CDT now priced starting at $2 399 comes with a 150 MHz Intel Pentium processor 16M of RAM a built-in 10X CD-ROM drive a 1.4G hard drive and a 11.3-inch SVGA color display.

The TravelMate 7060 is now available at $3 999 - an 11 percent price drop. This model comes with a 166 MHz Intel Pentium with MMX processor 32M of RAM a 2G internal hard drive and a 12.1-inch active-matrix display.

Because of the reduced cost of memory "we see more people going from 16M to a 32M [of memory] as a base line " said Craig Jones government channel director at Acer.

Likewise the company is finding that federal users are ready to move to 166 MHz with MMX compared with last year's buying season when many users were still going from 75 MHz to 150 MHz Pentium processors Jones said. "That's why everybody is going a little crazy in platform changes."

According to Toshiba's Mellon at least some of the demand for high-performance systems is coming from users looking to replace their desktop systems. "We are seeing increased demand for our [Equium] desktop products...but we are also seeing a certain high-powered user wanting a high-end [notebook] product with a docking station."

Toshiba cut prices across its notebook product lines including up to $1 300 off models in its high-end Tecra series lowering the entry price point to $2 199. But the company sees a lot of interest in the Tecra 740CDT at $5 499 which comes with a 166 MHz Pentium with MMX processor a 3G hard drive a 13.3 TFT active-matrix screen and a Noteworthy video phone with camera.

Also as part of a special promotion Toshiba has cut prices by several hundred dollars more for federal customers Mellon said. But the product most in demand at Toshiba is the Libretto 50 a 1.8-pound subnotebook that has a 75 MHz Pentium chip and a 1.2G hard drive.

Compaq is targeting low-end users with price cuts for Armada notebooks. Commercial pricing for the Armada 4100 starts at $999 which includes a 100 MHz Pentium chip 8M of RAM and a 810M hard drive. Compaq also sliced prices by up to 14 percent on midrange Armada 1500 models. Model 1530 - with a 133 MHz Pentium with MMX 16M of RAM and a 1.4G hard drive - now costs $2 499.

In Dell's case the focus on the federal market goes beyond special pricing. According to Mountain Dell's operations group has agreed to prioritize federal orders during the last months of the government's fiscal year.