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IBM to Cut PC Prices to Match Compaq's Move

August 24, 1994

International Business Machines Corp. is expected to slash prices today on many of its personal computer products, with cuts of up to 25% as a much-anticipated price war begins, analysts said.

IBM will be the first major computer vendor to slash prices in response to a move by Compaq Computer Corp. Last week, Houston-based Compaq, the nation's leading seller of personal computers, announced price cuts of between 11% to 22%. Analysts said the IBM cuts will be on selected models across the board with the exception of ThinkPad notebook computers and its PS/1 line.

Dave Kirkey, vice president for sales and marketing at Advanced Logic Research Inc. in Irvine, said the price cuts reflect declining prices for the central processing chips around which personal computers are built.

ALR's desktop PCs are already priced below comparable IBM and Compaq machines, Kirkey said, and his company does not plan to lower prices further in response to moves by the other manufacturers.

A spokesman for AST Research Inc., one of the world's leading manufacturers of desktop PCs, which also is based in Irvine, said Tuesday that the company had no comment on the expected price cuts by IBM.

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