Wal-Mart offers $298 laptop

Wal-Mart looks likely to shake up the laptop industry with a $298 Compaq Presario.

Lately Wal-Mart has expanded its laptop selection by 40 percent, but the aggressive cut in pricing on the computers and accessories as caught observers on the hop.

From Sunday, Wal-Mart will begin selling an exclusive Compaq Presario notebook computer that it developed in partnership with Hewlett-Packard for $298. This is nearly half the price of a similar unit.

It will have three gigabytes of memory, a 160 gigabyte hard drive, and will come pre-loaded with Windows Vista.

The price is also similar to a dysfunctional netbook with half the gadgets under the hood.

Other price cuts have followed as Wal-Mart attempts to attract the cash-strapped as part of its back-to-school push. It is selling Dell Inspiron laptops for $398 in colors ranging from pink to purple to aqua.

Analysts are saying that while the deal could mean that other retailers will be forced to follow suit.  Margins on laptops are still thin and this could mean that some manufacturers will have to make losses on each unit sold just to stay in the game.

This might be OK if this is the last of the recession, however if it is prolonged the industry could suffer from price cuts at this point.