February 7, 2000 4:55 PM PST

IBM plans new desktops, notebooks, appliances

Although it has taken its lumps in the PC market over the past two years, IBM is revamping its desktop line this spring to regain its place in the personal computer world.

In late April or early May, IBM said it will begin to sell "Luxor," an all-in-one computer with a flat-panel monitor and a DVD-ROM that drops down from a concealed panel behind the screen. At the same time, Big Blue will release "Stardust," a sub-$500 business PC that will contain processors from both Intel and AMD.

In addition, IBM will release the iCruiser, a Web terminal that will use a variety of operating systems and be sold or given away through Internet service providers (ISPs) and phone carriers. New versions of the IBM WorkPad, a spin on the Palm handheld, will also show up.

During this same period, the "Portofino" ThinkPad will hit the market to replace the current top-of-the-line ThinkPad 600. The Portofino will not only be lighter than the ThinkPad 600, it will come with an attachable camera and a slot for an IBM Microdrive, a removable storage technology developed by the company.

The new products are part of the initial wave of IBM's "Edge of Network," or EON, strategy. Under EON, IBM will market itself more aggressively as a provider of the full panoply of technology products and services. Customers, ideally, won't buy generic desktops in the future. Instead, they will buy client optimized for a larger network function or application that was also designed by IBM, according to David McAughtry, vice president of EON and Internet appliances.

"In terms of energizing the product line and growing the business, they still have to take steps to do that," said International Data Corp. analyst Roger Kay late last year when the EON strategy was first announced. "But they're beginning to develop a credible strategy. The question is, can they stick with it."

In 1998, IBM lost $992 million through PC sales.

The EON strategy is grounded in many ways on the fact that IBM wields technological resources and services organizations that dwarf the same capabilities of competitors. In a sense, the new desktops exist to entice corporate customers to invest in all-IBM systems.

The new strategy also serves to get IBM out of the "low-margin, low-cost, high-volume device" business, said McAughtry. While IBM has been gaining market share with ThinkPads, it has been not been keeping pace with competitors on desktops, according to market analysts' reports.

One hallmark of EON is that desktops will become simplified portals to a network, while computers in the background will take on greater computational tasks.

"As time goes by, the device is going to change from a multi-purpose, one-size-fits-all device that is optimized for the edge of the network," he said. "The applications will move toward the center while there will be a much greater degree of purpose optimization."

The first generation of EON products don't represent a completely radical break with the past, but the systems do differ from contemporary IBM PCs in their industrial design and the features they offer.

The Luxor, for instance, is based around a "zero" footprint design, he said. The computer is contained in the back of the flat panel. The unit can be stood on a desk, or attached to a moveable arm. An optical drive bay sits below the screen, but can be retracted into the body of the computer, said Howie Hunger, director of IBM thin clients. The system will cost under $2,000.

The Stardust, meanwhile, aims more for budget-conscious users. Similar to Compaq's iPaq, the Stardust sheds a number of older "legacy" technologies in favor of USB connectors. The system, which will start at $500, will contain Intel Celeron and Pentium III processors, but also AMD chips, said Hunger. Although AMD has broken into the small business segment, these computers could become the first mainstream business PC from a major company.

Both of these desktops, which are currently code-named after Las Vegas casinos, will come out under a new brand name, said Hunger.

The Portofino ThinkPad, by contrast, will emphasize new applications. The system comes with a camera that attaches to a port on top of the monitor, said Rick McGee, vice president in IBM's ThinkPad division. The new ThinkPad will also come with a branded "ThinkPad" button. Push it, and users are automatically connected to a self-help technology library and/or a company's internal tech support system.

Finally, the iCruiser will be IBM's offering in the Internet appliance space. Like Compaq and Intel, IBM will market the terminal to consumers through ISPs and telephone companies. The company is looking at a variety of operating systems for the device.

 

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