IBM on Monday was expected to launch a personal computer designed for the millions of small US businesses that have little technological know-how but are eager to use PCs to get ahead.
IBM's (IBM) latest move in the fast-growing small-business market comes as low cost "white-box" unbranded machines gain acceptance and competitors like Compaq Computer (CPQ) and Hewlett-Packard (HWP) promote their own small-business PCs.
IBM's new 300GL PC series will start at around US$850.
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 realized ... [they] haven't sold stuff to the ma's and pa's of this world."
IBM says its research indicates small businesses don't use a lot of the stuff ordinarily packed on a PC, but are looking for new technologies that make operations easier.
Among its features, the 300GL will offer speech recognition technology and e-commerce software.
IBM is also 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 are selling for $599 or less. 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 its 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 that resellers remain committed to IBM, Compaq, and Hewlett-Packard PCs even as the clones undercut them in price. The study said resellers had found a wide variation in the performance and reliability of unbranded machines.
Copyright© Reuters Limited.
