There's another round of computer discounting going on.  today's Wall
Street Journal tells more below.

Kelly






The Wall Street Journal

August 13, 2003


    Computer Deals Hit New Lows

With Sales Soft, Companies Push Back-to-School Bundles

    By PUI-WING TAM and WAILIN WONG
Staff Reporters of THE WALL STREET JOURNAL

    The tech bargain-basement sale is on.

    As the back-to-school season kicks into gear, tech companies are
rolling out discounts on everything from personal computers to printers
to wireless devices. One example: eMachines Inc. is now selling desktops
for $399 that include a "rewritable" compact-disc drive, which lets you
record digital music and burn photos.

    This year, PC makers are aggressively pushing bundled deals, selling
a computer and monitor and sometimes a color printer for a single price.
Some of these bundles are going for unprecedented prices. Circuit City
Stores Inc. is selling an eMachines PC with a 16-inch flat-screen
monitor and color printer for $369.99. Staples Inc. has rolled out three
new bundled deals this year (ranging in price from $799 to $999),
compared with only one last year. Some of these computers have a hefty
256 megabytes of memory, which is enough to build a digital-music
library or an electronic photo album.

    Even hot product lines, like laptops with built-in wireless
capabilities, are being discounted heavily. Staples, for example, is
selling a laptop with Intel Corp.'s latest chip for $1,299, some $200 to
$300 less than what it has been selling for. With more colleges setting
up wireless zones on campus so students can roam from the dorm room to
the lab to the library without losing their Internet connection, tech
companies are betting these laptops will be big sellers.

    STUDENT DISCOUNTS:

    The back-to-school season is a crucial period for tech companies,
launching their key selling season. While sales of computers and other
electronics have been slowly recovering over the past few quarters, a
weak back-to-school season could send the industry back into a slump. In
a July survey from research firm NPD Group Inc., 59% of consumers said
they intended to spend "a little less to much less" on tech this year
than in 2002. So tech companies from Hewlett-Packard Co. to Palm Inc.
are stepping up their promotions.

    The back-to-school discounts cover a range of gizmos, from
multitasking printers to hand-held computers. Apple Computer Inc. is
offering a $99 rebate to any student, kindergarten through high school,
who buys a Macintosh computer and an H-P DeskJet or Photosmart printer
-- essentially giving away the printer. Palm, too, is offering some
freebies: It is giving away a portable keyboard to anyone who buys one
of its hand-held devices during a back-to-school "demo" day at a
retailer.

    "Deals are definitely more prevalent this back-to-school period,"
says Toni Duboise, an analyst at tech tracker ARS Inc. "There are many
companies giving up to $150 in instant savings, which is pretty
aggressive."

    Amanda Yee, a sophomore at the University of Illinois-Urbana
Champaign, is considering an $800 Toshiba laptop that she saw at a Best
Buy store outside Chicago. "It's the cheapest one I've seen," said Ms.
Yee. She likes that it has a CD burner and digital videodisc player and
is eager to replace her year-old desktop, which she says is unwieldy.

    More Discounts Possible

    The back-to-school season runs through early September -- and the
deals will likely become more pervasive as weeks tick by. While an item
that is already on sale isn't likely to get any cheaper, products that
haven't been marked down may yet be discounted before the season ends.

    Currently, the best values are the bundled deals. The more expensive
bundles generally feature computers with faster chips and more memory,
as well as extra features such as DVD-rewritable drives. Often, the more
pricey bundles also come with flat-panel liquid crystal display screens,
which are sleeker and have a sharper picture than the cathode-ray
monitors.

    Staples is offering a package with an H-P desktop and a 15-inch
flat-panel liquid crystal display screen for $799; another package
features a Northgate PC with a DVD drive, a 17-inch liquid crystal
flat-panel display and a color printer for $999.

    Comparison Shopping

    Bundling appeals to manufacturers and retailers because it gives
them a way to sell several products instead of just one. For consumers,
the attraction is value and convenience -- it is an alternative to
spending hours combing through a catalog, trying to figure out which
printer to pair with which monitor.

    While bundled deals are now ubiquitous, you need to look around
before pulling out your wallet. Some offers are only available online,
directly from the manufacturer, while others are unique to a particular
retailer -- and increasingly shops have the flexibility to set their own
prices.

    The deals on laptops are expected to attract a lot of attention.
Notebook computers have been surging in popularity -- world-wide
shipments jumped 14% in the first quarter, while desktop shipments fell
0.6%, according to International Data Corp.

    Range of Options

    H-P is selling an entry-level Pavilion laptop for just $699 (after
the rebate), about $100 off H-P's previous cheapest laptop price. There
are also steeper options, with bigger screens and more memory.
EMachines, for example, is offering a laptop with a 15.4-inch screen and
built-in wireless capability for $1,199, down from $1,249.

    Write to Pui-Wing Tam at [log in to unmask] and Wailin Wong at
[log in to unmask]

    Student Discounts

    Here's a taste of what tech companies are offering this
back-to-school season:


    DEAL PRICE COMMENT

    Bundle from Circuit City with eMachines desktop, flat-screen 16-inch
monitor, and color printer $369.99 Bought separately, these items could
easily total over $800. But you get what you pay for: The monitor uses
older cathode-ray technology, not the liquid crystal display technology.

    Bundle from Staples with H-P desktop, 15-inch flat-panel display,
mouse and keyboard $799 Has plenty of memory, and the flat-panel display
uses liquid crystal display technology, which makes for a sharper
picture.

    Bundle at Wal-Mart with H-P notebook, plus a color printer that also
scans $998 Good value: Most laptops alone still hover around $1,000, and
multifunction printers are jumping in popularity.

    H-P is offering a laptop with Intel's new wireless technology $1,299
Many other notebooks with this same chip can cost $200 to $300 more. But
if your dorm room isn't already wireless-ready, you'll need a wireless
access node that will cost an extra $50.

    Staples has a special on printers that can also fax, scan $99 Last
year, these same printers cost an extra $100. table end


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