HP Goes For Low Price, Big Features With New Pavilions
By Doug Olenick -- TWICE, 7/9/2001
NEW YORK— Hewlett-Packard put the PC back into PC Expo last month by launching its back-to-school desktop computer line that features a 1GHz and higher processors and aggressive price points to better compete with Dell's and Gateway's new pricing initiatives.
The three-PC line started shipping last week and is the first in a new pricing initiative by HP to bring high-end features such as Intel Pentium III 1GHz processors and top-tier graphics cards into the mid-price range, said Mark Bony, HP's Pavilion product manager. These are also HP's first Windows XP operating system ready computers. While the PCs will not ship with XP, which will not become available until the Fall, they have the hardware capability to run the OS. Like most of the PC industry, HP hopes XP will immediately reinvigorate the lagging consumer PC market.
"We hope this compliancy will help keep sales going to the XP launch," said Bony, adding that customers who buy an XP-ready HP PC can buy the upgrade to the new OS for $29.99.
With pricing starting at about $1,100 for the new Pavilion 2950, HP hopes to entice customers with a combination of low prices and a feature set normally found on its higher-end models. The decision to come in so low was in the works prior to the Dell and Gateway decisions in June to kick-off another PC price war by reducing prices, but did give HP additional impetus to keep costs down, he said.
"We need to be competitive, yet stay profitable," Bony said of the balance HP is trying to strike.
The Pavilion 2950 features HP's super slim tower design and, with a $1,099 estimated street price, is targeted at students. The PC features the Pentium III 1GHz processor, 128MB of RAM, a 40GB hard drive, 10/100 network card, a combination CD-RW/DVD-ROM drive and digital editing software. A wireless keyboard and mouse are included and an optional LCD monitor is available for $799. The 2950 is only selling through CompUSA, but a follow on version, the 2960, will be widely distributed, Bony said.
The step-up model is the Pentium 4 1.3GHz-powered Pavilion 7960. It has an estimated street price of $1,199, ships on July 15 and includes dual CD-RW and DVD-ROM drives, 60GB hard drive, 128MB Rambus memory, 32MB graphics card, and USB and IEEE 1394 ports.
The Pavilion 9895 is the top-end model. Now shipping with an $1,899 estimated street price, it has a 1.7GHz Pentium 4 processor, but is otherwise similar to the 7960.
Bony said most of HP's PCs going forward will have dual optical drives, a combination of CD-ROM, CD-RW, DVD-ROM and eventually DVD+RW. Consumers prefer the dual well format for ripping music CDs, because it is faster to go from CD to CD-R than to download the music onto the computer's hard drive and then burn it to a CD-R.
The DVD Writer 100i, the first DVD+RW drive, should arrive in November, said Christine Roby, worldwide product manager for HP's Colorado Personal Storage System division. The 100i, dubbed a super-combo drive by HP because it can also burn CD-R/RW media, will make its way into the product line through HP's configure-to-order program and as a high-end PC.
