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Hewlett-Packard Co. launched a sub-$900 version of its Media Center PC on Friday, the first to use the new Prescott processor from Intel.

Prices for configurable versions of the m400 Photosmart PC will start at $879.99 after a $50 rebate, while customers can also select from preconfigured models that are priced beginning at $1,249.99. As with other Media Center PCs, the devices are designed around the Windows XP Media Center Edition; HP’s machines use the “2004” version of the software, which improves the PVR and calibration functionality.

Although price cuts on PCs are common, HP executives said previous versions of the Media Center PC used pricey components that had shipped in limited volumes. Now that those parts have shipped in higher quantities at lower prices, HP can pass along the price savings to the consumer, said Ameer Karim, manager of worldwide product marketing for consumer products at HP’s global business unit in Palo Alto, Calif.

“It actually started from last year, in late fall, when we were going to configure-to-order Media Center PCs. Our goal has been to hit (a) sub-$1,000 (price point),” Karim said. Ideally, HP would like to design a sub-$800 PC, perhaps after rebate, he said.

The new m400 line includes three fixed models which will be sold at retail – the m490n, m480n and m470n — as well as configure-to-order systems which will be sold on HP’s own website. Both the configurable and fixed models use the standard “Northwood” Pentium 4 processor at speeds up to 3.4-GHz as well as the new Prescott processor at speeds as fast as 3.2-GHz.

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