Vendors Take New Courses With Entry-Level PCs

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By Amy Gilroy

& Doug Olenick

PC retail newcomers Mitsuba and Future Power, and a resurrected AST, will attempt to carve out a place in the crowded entry-level PC market this summer.

Mitsuba and Future Power will incorporate technology such as CD-RW and DVD-ROM drives in PCs priced as low as $700 as a differentiator, while AST will try to work its way back into contention with a multi-pronged attack that has the brand selling through retailers, online merchants, and value-added resellers (VAR).

Future Power's strategy also focuses on VARs, but where AST wants to attract more business customers, Future Power's aim is to lure home users to buy from a VAR's storefront operation.

Mitsuba, under the Xtreme PC name, will ship its first PC featuring both a CD-RW drive and CD-ROM, said executive VP Randy Scott. The company, which entered the market in January, employs an across-the-board pricing strategy ranging from $399 (after rebate) to $1,299 and is "looking at the possibility of having a $299 desktop in the fourth quarter," Scott said.

Xtreme PC's back-to-school line shipped late last week. Leading the line was the XT-3511M, a Cyrix M2 350MHz-powered machine with 32MB of RAM, 3.2GB hard drive, 56K v.90 modem, and 24x CD-ROM at a street price of $399 after a $50 mail-in rebate.

The step-up XT-4012A uses an AMD K6-2 400 processor with 4.3GB hard drive and 8MB of AGP-2 video at $499.

Xtreme PC models come with the AMD K6-2 400MHz processor, 54MB of RAM, 6.4GB hard drive, 8MB AGP-2 graphics card, 44x CD-ROM and 2x rewrite, 6x write and 24x read CD-RW drive to be priced between $899 and $999.

Xtreme PC retailers include ABC Warehouse, American TV, Brandsmart U.S.A, H.H. Gregg, Nationwide Computer & Electronics, and Nebraska Furniture Mart.

AST, resurrected under the leadership of Beny Alagem, former CEO/president of Packard Bell, is taking a different strategic approach then it had during its glory days.

Marketing VP Jody Brightman said the company will focus less on retail and concentrate mainly on small- to medium-size business sales. AST is beginning its return to retail with ads running in Circuit City fliers, according to ARS, Irving, Texas.

AST PCs are also found on QVC and onsale.com, said Brightman. "In the long term, retail will be a smaller percentage of our business. It isn't a major thrust." In March, AST began offering on its web site a line of interim products that are "not wholly redesigned" from past AST models, she said, under the Bravo and Ascentia brands, but this summer consumers will see a completely revamped line under new sub-brands.

Products currently available on the AST web site start at $599 for a 333MHz, 32MB PC under the Bravo name and Ascentia notebooks priced at $999.

Future Power, which is backed by Daewoo, has sold two low-end desktop PCs through VARs since January and this week will add Intel Pentium II- and III-powered units.

Sales VP William Volks plans to leverage Future Power's VAR business into the retail market. "We are counting on the customer service and expertise of these small, local dealers," he said, adding that the PCs are now sold through about 200 storefronts.

This expertise is important because the end user must receive all technical support from the dealer as Future Power does not offer that option. To help attract consumers' attention, the company is offering co-op ad dollars on a case-by-case basis.

The new product lines are the Signature and Power series. The former features a Pentium II 350MHz or 450MHz processor, while the latter steps up to Pentium III 450MHz and 500MHz chips. Volks said these PCs are targeted to game players and the small business market. Other details and prices were not available at press time.

In other news, CTX will be entering the summer season with a new strategy that focuses on aggressive pricing.

Since parent company Chuntex filed for reorganization in Taiwan in April and closed a notebook and PC factory, the company is sourcing the new machines from outside, according to CTX senior VP of retail sales Robert Luke. CTX will maintain a "strong retail presence," Luke said, adding that back-to-school models are expected to lead with an AMD K6-2 400MHz or Intel Celeron 400 model in the $499 range.

After expected processor price reductions on July 18, CTX also plans to offer a PIII 450 bundle in the $1,199 range.

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