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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: rupert1 who wrote (53511)	3/15/1999 8:45:00 PM
From: Elwood P. Dowd	Read Replies (2) \| Respond to of 97611

Monday March 15, 8:19 pm Eastern Time CORRECTED - Microworkz to sell PCs as cheap as TVs In NEW YORK story, please read in headline ''Microworkz...'' instead of ''Microworks...'' (corrects spelling) A corrected repetition follows. By Eric Auchard NEW YORK, March 15 (Reuters) - Microworkz Computer Corp. on Monday unveiled a fully equipped desktop computer priced at $299, breaking a psychological barrier that puts PC pricing in line with that of television sets, stereos and other basic consumer electronics. ''We're pricing our computers at a point where we can effectively demolish the socioeconomic barriers between the 'data haves' and the 'data have-nots,''' said Rick Latman, president and chief executive of the Seattle-based direct PC marketer. He was referring to the company's target market -- the 50 percent of U.S. households without PCs, not to mention Internet access -- and the $299 pricing that most marketers consider crucial to reaching consumers without much disposable income. Included with the $299 machine is a year's free Internet access from EarthLink Network Inc. (Nasdaq:ELNK - news) and a suite of Corel Corp. (Toronto:COS.TO - news) WordPerfect software, the Seattle-based company said. The Internet connection alone is worth $240. The low-cost PC, known as the WEBzter Jr., runs on a Cyrix 300 MII computer chip and is standard in all basic respects except for Microworkz's penchant for substituting the letter ''z'' for ''s'' in corporate and product names. ''The average consumer has an antiquated box that he's overpaid for,'' said Latman in a phone interview. The 32-year-old executive, once a Wall Street investment banker with Merrill Lynch, left in 1993 to join Microworkz. Currently, the low-price range for major computer makers like Compaq Computer Corp. (NYSE:CPQ - news), and Hewlett-Packard Co. (NYSE:HWP - news) and International Business Machines Corp. (NYSE:IBM - news) is $499 to $699. Fremont, Calif.-based eMachines now markets a $399 PC that is considered the lowest priced machine now generally available in the United States. The PC is built by eMachines' Korean backers -- TriGem Computer Inc. and Korea Data Systems. Microworkz is backed by six strategic partners -- key component suppliers -- that provide parts at low costs -- allowing the company to pass along the savings to consumers. The new machines -- and low-cost offers to follow from other computer makers with similar strategies -- promise to put added pressure on the profits of major PC manufacturers, whose lowest-priced machines had sold for $699 only last summer, but historically have averaged better than $1,500 per machine. The WEBzter is aimed at kids, families, retirees, schools and small businesses -- ''anyone who is just plain old tired of missing out on the Internet and e-mail,'' Latman said. The $299 WEBzter Jr. includes a 3.2 gigabyte, or billion byte, storage drive, a rapid 56,000-bit-per-second modem for connecting to the Internet, sound and video components, a keyboard and a mouse. It carries a warranty and is upgradeable. It complements the company's existing WEBzter for $499 and its WEBzter Sr. at $699, which come with monitors included. The $699 machine is based on an Advanced Micro Devices Inc. (NYSE:AMD - news) computer chip. Cyrix and AMD chips are low-cost alternatives to microprocessors from industry leader Intel Corp. (Nasdaq:INTC - news) The computers must be purchased directly via telephone or over the Internet from the company. Half of current sales come from its Web site at microworkz.com, Latman said. Microworkz will build the machines at its assembly plant in the Seattle area. The WEBzter Jr. will go into full production in mid-April. The company has the capacity to build as many as 200,000 computers per month. Closely held Microworkz had revenues of $39 million last year and aims for sales of $150 million in 1999, requiring sales of only 200,000 PCs this year. It appears to be closely aligned with National Semiconductor Corp.'s (NYSE:NSM - news) Cyrix unit, although Latman declined to comment directly on the ties. ''We are in the midst of a private placement and as soon as that is done we are headed for our IPO,'' Latman said, referring to Microworkz current funding efforts and plans to sell stock in a public offering sometime this year or by early 2000. Stealing a page from Apple Computer Inc.'s (Nasdaq:AAPL - news) move to offer its iMac PCs in multiple colors instead of the traditional beige of most PCs, the WEBzter Jr. is scheduled to come in five different colors by Christmas, Latman said. Microworkz also plans to offer handheld computers including one that functions as an affordable replacement for a standard telephone. The computer-phone, to introduced this fall, will be sold in partnership with a major phone vendor, which Latman declined to name. The company's plan contrasts to what so far amounts to a marketing stunt by Free-PC, a Pasadena, Calif. start-up founded by Internet entrepreneur Bill Gross that last month offered 10,000 new Compaq home PCs to qualified customers who agree to accept special advertising and direct offers from marketers. Free-PC reported an overwhelming response to the offer, but only a fraction of the potential customers could qualify. More Quotes and News: Advanced Micro Devices Inc (NYSE:AMD - news) Apple Computer Inc (Nasdaq:AAPL - news) Compaq Computer Corp (NYSE:CPQ - news) Corel Corp (Toronto:COS.TO - news) Earthlink Network Inc (Nasdaq:ELNK - news) Hewlett-Packard Co (NYSE:HWP - news) Intel Corp (Nasdaq:INTC - news) International Business Machines Corp (NYSE:IBM - news) Nationa