In 1997, Compaq scored a major pricing coup by offering the first major-label desktop for under $1,000. Now, Compaq acquirer HP is offering a desktop (sans monitor) for $249, almost to the magic $199 consumer electronics price point. With back-to-school season upon us, low priced computers will have a disproportionate impact on manufacturers’ results. (Dell is offering desktops as low as $290 and laptops for under $550.)
To make money on these deals, manufacturers will need to effectively cross sell accessories and services such as MP3 players, cameras, printers, portable storage, antivirus kits and other software.