Packard Bell introduces cut-rate PCs

Packard Bell NEC has launched a new fleet of cheap computers, including one of the first sub-$1,000 Pentium III systems from a major vendor.

For $499, customers can get the Packard Bell 883 with a 366MHz Celeron processor, 32MB of memory, and a 4.3GB hard drive. The Packard Bell 8975 with 450MHz Pentium III, 64MB of memory, and a 10.2GB hard drive will retail for $999.

Observers warn that even aggressive price cuts may not improve the company's dire financial straits. Packard Bell NEC has lost an average of $500 million over the past three years, according to various estimates. Analysts say the company has been hard hit by a trend it once embraced: cheap PCs. In the last six months it has lost both shelf space and market share to upstart companies like Emachines, as well as established players such as Compaq Computer.

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