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Time - Man of the Year
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Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso
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11029915.000
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1993-04-08
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2KB
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40 lines
THE WEEK, Page 19BUSINESSThe Great PC Price War
Personal computers have never been so cheap -- or sold so
furiously
The craziest year in personal computing has got even crazier.
Compaq, which set off a fierce price-cutting war this summer
when it slashed its PC prices one-third, has trimmed the tags on
some models an additional 32%, bringing the cost of its
cheapest desktop machine to below $800 -- a fraction of what
customers were paying for PCs with a lot less memory and power
just a few years ago.
But there is method in this madness. By slashing prices,
big-name U.S. computer makers are not only squeezing out
cut-rate foreign "clones," but they are also whipping American
consumers into a PC-buying frenzy. Compaq, which shipped 200,000
machines in September alone, reported record third-quarter sales
last week. Apple, which has been whittling down its hefty
margins, watched its income soar 71% during the past year.
Even mighty IBM has caught the fever. The world's largest
computer maker was slow to respond to the rounds of price
cutting this summer, and as a result its share of the
personal-computer market slipped precipitously. But Big Blue's
freshly restructured PC division showed a new nimbleness last
week. The day after Compaq's latest price cut, IBM unveiled its
long-awaited PS/ValuePoint series: a line of desktop computers
aimed at high-volume corporate buyers and priced to sell for
less than comparable Compaq machines -- in one case, exactly $5
less.