Hewlett-Packard Plans to Cut Its Prices on Network Servers

Hewlett-Packard Co. said it is cutting prices of office computer servers by as much as 23% because of lower component costs and supply-chain efficiencies. The world’s No. 2 computer maker said it will reduce prices by 5% to 23% on most Netserver-brand server systems, the gear that allows PCs to communicate in corporate networks and access the Internet. Palo Alto-based Hewlett-Packard is facing competition from market leader Compaq Computer Corp. and rival Dell Computer Corp., said Brad Day, an analyst with Giga Information Group Inc. Dell has been undercutting Hewlett-Packard on price, he said. The price of memory chips has declined “pretty dramatically” in recent months, allowing Hewlett-Packard to trim prices on its servers, said Wendy Abramowitz of Argus Research. Hewlett-Packard shares rose 69 cents to close at $32.44 on the New York Stock Exchange.