Dell Follows IBM With Server Price Cuts

The steepest cuts were reserved for Dell's PowerEdge 6600 four-way servers, with prices slashed by up to $2,800, or about 22 percent, Dell executives said. Rack-dense server prices were cut by up to 10 percent.

Wednesday's new prices were not a reaction to IBM's Tuesday cuts (see story), according to a Dell spokesperson. Instead, the spokesperson called such cuts "the DNA of the Dell model" and something the company does every day.

Other price cuts from Dell include up to $50 on Optiplex desktop computers and up to $550 on certain Precision workstations for corporate and institutional customers.

Dell also is targeting consumers and small and midsize businesses with cuts of up to 6 percent for its Dimension desktops, 3 percent for its Inspiron notebooks, 13 percent for printers and projectors, and 20 percent for its 17-inch flat panel monitors.

Most of the price changes take effect immediately, with a few scheduled to be implemented on Thursday.

Dell's cuts also come a day after HP reported lower than expected earnings due in big part to HP's PC business. HP posted an operating loss of $56 million in the recently ended quarter, compared to a profit of $21 million the quarter before because of what CEO Carly Fiorina called a double-digit year-over-year decline in commercial desktop revenue.

"Our challenge in the personal systems business continues to be desktops, particularly in the U.S.," she said. "Reduced volumes due to seasonality and our very own overly aggressive pricing actions negatively impacted gross margins."

She said that the company has taken actions to stabilize pricing and would forego market share gains for profitability.

Craig Zarley contributed to this story.