In a statement, Compaq, the world's No. 1 maker of personal computers, said the price cuts on its Prosignia desktop personal computer line matches or beats similarly equipped systems from direct rival Dell.

A Dell spokesman said he had not seen details of the price cuts and declined to comment until he could make comparisons with his own company's products.

On November 11, Compaq staked out new territory with its line of computers which it said it planned to market directly to small businesses, as part of a major sales shift away from its traditional reliance on its army of indirect distributors.

The company said the Prosignia desktop PCs continue to sell at least three times faster than the company had originally forecasted internally, repeating a boast thatCompaq CEO Eckhard Pfeiffer made at a trade show last month.

A spokesman declined to quantify the actual number of shipments or revenues received from sales of the new machines.

As examples, Compaq said it cut the price of its low-end Prosignia 310, which is equipped with an Intel Celeron 300a computer chip and a minimal amount of computer memory, to $1,249, or two per cent off its previous price of $1,279.

Its mid-range Compaq Prosignia 330 with an Intel Pentium II 350 megahertz processor and a moderate amount of computer memory, was reduced seven per cent to $1,629.

The price of a top-of-the-line Prosignia 330, with a speedy 450 megahertz Pentium II chip and crammed with computer memory, was cut five per cent to $1,999.

All of these systems include a 17-inch computer monitor.