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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (1136)	1/25/1999 8:25:00 PM
From: porcupine --''''>	Read Replies (2) \| Respond to of 1722

IBM launches small business PC By Andrew Hay NEW YORK, Jan 25 (Reuters) - International Business Machines Corp. on Monday will launch a personal computer designed for the millions of small businesses that have little technological know-how but are keen to use PCs to get ahead. IBM's latest move in the fast-growing small business market comes as low cost "white-box" unbranded machines gain acceptance and competitors like Compaq Computer Corp. and Hewlett-Packard Co. promote their own small business PCs. IBM's new 300GL PC series will start at around $850. Customers will have the option of speech recognition technology software that allows customers to give commands by voice instead of via keyboards and computer mice. The 300GL will also offer electronic-commerce software. Research by IBM indicates small businesses do not use a lot of stuff that is ordinarily packed on a PC but are keen to use new technologies that make operations easier. Small businesses account for around 45 percent of the PC market and are its fastest growing sector, according to a 1998 study by research company International Data Corp. Out of 10.3 million small and medium-sized businesses in the United States, 10 million are small businesses and half of them have yet to get PCs and Internet access, said Yankee Group analyst Joseph Villarosa. "IBM has hit the Fortune 500 companies," Villarosa said. "They and Hewlett-Packard and Compaq have realised...'we haven't sold stuff to the ma's and pa's of this world and there's ten million of them." IBM is emphasizing the service, support and leasing program that comes with the 300GL. Many white-box PCs that have around the same horsepower as the IBM PC but are selling for under $599. Compaq has been offering $100 rebates on its machines to PC buyers signing up for Internet access. To compete amid rapidly plummeting prices, IBM must convince customers that their machines come with the best support and services package in the business, analysts said. "A PC is a PC is a PC," said Technology Business Research analyst Joseph Ferlazo. "The question is what comes after that." Recent research by Computer ResellerNews, a weekly computer trade publication, indicates resellers remain committed to IBM, Compaq and Hewlett-Packlard PCs even as unbranded, so-called clone machines undercut them in price. The study said resellers had found a wide variation in the performance and reliability of unbranded machines. IBM is selling the 300GL through retailers and resellers as well as direct via the Internet and other channels. Compaq Computer Corp. is focusing on selling its small business PCs direct to customers, rather than through resellers. "We feel like we need to have a market presence so people can see what they're buying," said IBM spokeswoman Judy Smolsky. Villarosa said resellers have helped Compaq become the No.1 PC maker and the company may not be wise to turn its back on them as it takes on the small-business market. The 300 GL is one of several new IBM small business initiatives. The company has launched a marketing program with CompUSA Inc. and OfficeMax Inc. and introduced the ThinkPad 390 series of notebook PCs which caters to the needs of small businesses. Villarosa said the roll out of the 300GL is a step in the right direction but IBM may have tried too hard to make the PC cater to the needs of all small businesses. In doing so, the 300 GL may have features that are too complex for some small-businesses and lack features technology-savvy companies are after. "I think they should think out of the box a little and try and get the companies who aren't online and don't have computers yet," he said. Smolsky said that is what IBM has done by offering a range of machines with different features at different prices. ((New York News Desk 212 859-1721 andrew.hay@reuters.com))