South Korea’s Hyundai, already known for its cut-price cars, is introducing a $699 IBM-compatible personal computer, the cheapest of the so-called clones to be sold through U.S. retailers.

Unlike most computers, this model--to be called the Blue Chip--will be sold through discount stores. It has been test marketed in Target stores in Phoenix, and this week it will be test marketed in 16 Caldor stores in the Boston area.

Tom Hoover, a spokesman for Blue Chip Electronics, the Chandler, Ariz., company that is marketing the computer, said it would be available nationally in October. He said the company expects to sell 50,000 to 55,000 machines in the first six months.

The machine comes with 512,000 characters of memory, one floppy disk drive, a one-year warranty and the MS-DOS operating system used on IBM’s Personal Computer. It is the first computer made by Hyundai, a giant Korean conglomerate.


The $699 price tag is more evidence of plunging personal computer prices, which have dropped 30% since last summer.

“I think its a fantastic value for the money,” said Jan Lewis, personal computer consultant with Palo Alto Research Group. Lewis said he saw no problem with consumers buying a computer from a mass merchandiser rather than a specialty store.