Sharp drops in the prices of a number of pc components starting in late 1997 had allowed pc makers to dramatically lower pc prices-sales of pcs priced under 1500 were becoming by early 1998. Compaq, ibm, Hewlett- packard, and several other pc makers had begun marketing sub 1000 pcs in 1997. In December 1997, the average purchase price of a desktop computer fell below 1300 for the first time. It was estimated that about half of all pc sales in 1998 were of computers carrying price tags under 1500 . growth in unit volume was being driven largely by sub 1000 pcs. The low prices were attracting first time buyers into the market and were also causing second and third time pc buyers looking to upgrade to more powerful pcs to forgo top of the line machines priced in the traditional 2000-3500 rang in favor of lower priced pcs that were almost as powerful and well equipped. Powerful, multifeatured notebook computers that had formerly sold for 4000 to6500 in November 1997 were selling for 2000 to 4500 in april 1998. The profits of many pc makers slipped in early 1998 because of the need to discount unsold higher priced machines still in inventory and on retails shelves.