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Compaq 386⁄25e-3⁄90
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1990-06-24
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Confidential / Apple Product Marketing
Contact: David Garr, Competitive Analysis, GARR1
COMPAQ INTRODUCES AGGRESSIVELY PRICED 386/25e 3/8/90
__________________________
SUMMARY
On Monday March 5, Compaq introduced the Deskpro 386/25e, an aggressively
priced 25-MHz 80386-based machine. We expect the 386/25e to eventually replace
the larger and more expensive 386/25 which has been available for almost two
years. The 386/25e is shipping immediately. Compaq also announced 4 Mbit DRAM
modules for the SLT/286 and price reductions on memory modules for desktop
systems.
_____________________
Overview of hardware.
The Deskpro 386/25e comes standard with 4 MB of memory, integrated VGA, and
four ISA slots. Three models of the 386/25e are available:
No hard disk: $6,499
60 MB disk: $7,699
120 MB disk: $8,499
The 386/25e is smaller than the older 386/25. Compaq calls it "a streamlined
desktop design that fits easily on a credenza." The 386/25 is large and clunky
looking. Compaq's more recently introduced systems, the 386s and the 386/20e,
are smaller form factor systems, and we had been expecting them to introduce a
25-MHz system in a similar size. We expect Compaq to phase out the older
386/25 over time.
Priced lower than older 386/25.
The 386/25e is a much better deal than Compaq's older 386/25. The version with
a 60 MB hard disk is priced at $7,699, which is $300 less than the 386/25.
However, the new 386/25e comes with 4 MB of memory and VGA standard, whereas
the previous model had only 1 MB and no video controller. In total, the
386/25e is priced about $2,400 less than the older model (when comparably
configured).
Memory prices decreased.
Compaq announced price reductions on 1, 2, and 4 MB memory modules for desktop
products. One MB memory modules are $499, 2 MB memory modules are $999, and 4
MB memory modules are $1,999. Therefore, Compaq's memory prices on these
modules are now the same as Apple's. (Compaq's memory had been priced at $699,
$1,299, and $2,599 respectively.)
With the 386/25e announcement, Compaq is indicating that it believes that all
higher performance PCs should have a minimum of 4 MB of memory. The Compaq
386/20e, the 386/25e, the 386/33, the 486/25, and the SystemPro all come
standard with 4 MB of RAM.
4Mbit DRAM modules for SLT/286.
Compaq also announced a $2,599 4 MB memory module option for the SLT/286
portable. Compaq is using 4 Mbit chips in these modules. The SLT/286
previously could only be upgraded to 3.6 MB (by adding three 1 MB memory
modules). It can now be upgraded to 12.6 MB when three of the 4 MB modules are
added.
Significance for Apple.
Compaq now has a very aggressively priced 25-MHz system. Here is a pricing
comparison of the Compaq 386/25e with the Macintosh IIci and the IBM 25-MHz
386. The IBM machine is priced over $2,000 more than Compaq's 386/25e. We
expect IBM to decrease its price sometime this year to bring it more in line
with Compaq.
Std Color keybrd Op. Total
config Monitor Sys.
Compaq 386/25 (4MB, 60HD) $7,699 $699 0 $340 $8,738
Macintosh IIci (4MB, 80HD) $8,669 $999 $229 0 $9,897
IBM PS/2 70 386 (4MB, 60HD) $9,890 $750 0 $340 $10,980
This comparison doesn't include some of the hardware that comes standard on the
Macintosh IIci, such as math coprocessor, built-in networking, SCSI, mouse, and
sound chip. Therefore, when industry analysts or customers make pricing
comparisons between the Compaq (and other PC compatibles) and the Macintosh,
Apple should attempt to ensure that costs for these additional hardware
features are included for both. When you add these features to the 386/25e,
its total price is increased by about $2,400, thus making the IIci less
expensive.
All megahertz are not created equal. National Software Testing Laboratories
compared the performance of the standard IIci (on-board video and no cache
card) with the older Compaq 386/25. We think NSTL's benchmarks are still
relevant since Compaq did not claim that the newer 386/25e was faster than the
previous 386/25. NSTL found that the standard IIci was 60% faster than the
386/25 running Excel, 103% faster running Illustrator, and 13% slower running
PageMaker. Averaging these three tests shows that the IIci was about 50%
faster than the 386/25 running these graphics-based applications.
IIci is a Macintosh. More important than its excellent performance and
standard hardware features, the IIci is a Macintosh. As such, it has all the
Apple advantages over Compaq's 386/25e and other PC compatibles (easier to use,
thousands of consistent applications, etc.) People comparing a PC compatible
with a Macintosh should determine what they can accomplish with the whole
system, and not just compare megahertz and price.
______________________
If you'd like more information, please link COMPETITION.
We also welcome your comments and suggestions.