Hewlett-Packard Announces Significant Price Reductions on Desktop PCs and Servers

Strategic Insights -

Hewlett-Packard Company (HP) has set a new pricing standard in the PC industry by announcing price reductions of up to 26 percent on its Vectra brand desktop PCs and up to 22 percent on its NetServer brand PC servers. The price reductions are effective immediately and cover the entire family of HP Vectra PC models, including the award-winning HP Vectra XU high-performance PC series.

Key Takeaways:

  • HP's desktop price reductions range from 26 percent to 35 percent lower than comparably equipped models from Compaq and IBM.
  • The price reduction applies to HP Vectra VL2, M2, XM2, N2, XU, and HP Interactive PCs, with an estimated street price of $1,930 for an HP Vectra XM2 4/66 model 540i, compared to $2,750 for a similarly configured Compaq DeskPro 466XL.
  • HP's NetServer brand PC servers have been reduced by up to 22 percent, with prices starting at $3,399 for the entry-level HP NetServer 5/66 LC Model 1.
  • The price reductions are made possible by increased manufacturing volumes, distribution efficiencies, lower component prices, and newly expanded distribution channels.
  • HP has expanded its PC distribution to increase sales through authorized value-added resellers (VARs) in the United States, and also partnered with leading distribution companies such as Ingram Micro Inc., Merisel Inc., and Tech Data Corp.
  • HP Vectra PCs have been recognized for outstanding performance, reliability, and innovative system design, with the highest overall customer-satisfaction ranking among business end users in the 1994 J.D. Power and Associates' Desktop Personal Computer Customer Satisfaction Study.

Statistics:

  • HP has reduced prices on its desktop PCs by up to 26 percent to 35 percent lower than comparably equipped models from Compaq and IBM.
  • The estimated street price of an HP Vectra XM2 4/66 model 540i is $1,930.
  • The estimated street price of a similarly configured Compaq DeskPro 466XL is $2,750.
  • HP's NetServer brand PC servers have been reduced by up to 22 percent.
  • The entry-level HP NetServer 5/66 LC Model 1 has a price of $3,399.
  • HP Vectra PCs had the highest overall customer-satisfaction ranking among business end users in the 1994 J.D. Power and Associates' Desktop Personal Computer Customer Satisfaction Study.

Sources:

  • BUSINESS WIRE, December 1, 1994, "Hewlett-Packard Company Announces Price Reductions on Desktop PCs and Servers"
  • Hewlett-Packard Company, 1994 Annual Report, p. 15
  • J.D. Power and Associates, 1994 Desktop Personal Computer Customer Satisfaction Study
  • IDC, 1993 PC Server Shipments Report