HP Jump Starting Compaq Brand with Ultra-Cheap Machines

Hewlett-Packard bought over Compaq in 2002, but never promoted it in any way except as a secondary brand. Choosing to keep it alive mainly in Asia where the brand is very popular, HP, more or less, ignored the brand. But that train of thought has now changed.

HP now aims to position Compaq not just as cheap computer equipment label, but rather a brand that will have mainstream appeal in the U.S. With that strategy in mind, Hewlett-Packard announced the rollout of a line of ultra-inexpensive PC. This line will include both laptops and desktops, and with a view towards extreme budgets.

For example, the first Compaq on offer (the CQ61z), is a 15.6-inch laptop with an AMD Sempron CPU, 2GB of RAM, DVD burner, 160GB hard drive, and discrete graphics. The machine will run Microsoft Windows 7 Home Premium as the OS. These all sound fairly run-of-the-mill and mundane till you get to the price. At $399, it puts the laptop in price comparison with your average netbook, and while it compares equally in price, in features it is far ahead. With this approach, Compaq aims to break the netbook market and return to a mainstream IT product level. On the desktop front, the Compaq Presario 4010f has almost similar specs albeit with a bigger 250GB hard drive, and is priced at $309 after a $100 rebate.

The ramifications of this positioning will be interesting to watch, as the inexpensive Laptop will not only have an impact on the netbook market, but it will also have an effect on the more expensive full featured laptop market.

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