A $199 PC with no Windows, no Intel inside
Reuters
Dec. 8, 2002 10:11 AM
LOS ANGELES - Here's the pitch for what could be your next PC: No =
Microsoft,=20
no Intel -- and almost no markup.=20
By dropping software from Microsoft Corp.(Nasdaq:MSFT)=20
and avoiding ''Intel inside,'' retailer Wal-Mart Stores Inc.(NYSE:WMT)=20
is offering a $199 computer it says is a hot seller on its Web site, =
attracting=20
novices looking for a way onto the Internet as well as high-end users =
wanting a=20
second box.=20
The promise of a PC replacement -- slimmed down to surf the Web =
and carry=20
out limited tasks -- has long tantalized the tech world but failed to =
generate=20
many sales, especially as prices of name brand computers have slid.=20
The Wal-Mart machines are full-fledged, if low-powered, =
computers, but=20
they are not loaded with Microsoft's Windows software or the best known=20
microchips -- meaning that the average user will not get exactly what he =
or she=20
is used to.=20
''It is going to be harder to get people to adopt that sort of =
stuff''=20
since most consumers want Windows, concluded Roger Kay, a PC analyst at=20
International Data Corp research group.=20
Although the Wal-Mart machine has a slower microchip than more =
expensive=20
computers, rival machines may not surf the Web much faster, since the =
speed of=20
the Internet connection is usually the bottleneck in online tasks, said =
Rob=20
Enderle, an analyst at competing research group Giga.=20
''It is awfully hard to beat this for the price point,'' he said. =
As Wal-Mart heads into its first holiday season offering the $199 =
machines, it says sales are already exceeding expectations.=20
''What we're finding is largely tech enthusiasts buying these =
items, but=20
we've also seen some individuals, as well as businesses and some =
schools,'' said=20
spokeswoman Cynthia Lin. She declined to quantify sales, although =
knowledgeable=20
sources put them in the thousands of units per month.=20
BROADBAND MACHINES=20
The machines, manufactured by Microtel Computer Systems, aim to =
provide=20
an experience similar to Windows by using operating systems based on the =
free=20
Linux system. They support high-speed Internet (though the service =
itself is not=20
included) and have a CD drive that can read music and data disks, but =
not record=20
them.=20
They also have relatively small hard disk drives of 10 gigabytes. =
There is no modem, floppy disk drive, or monitor, and the VIA=20
Technologies Inc. (2388.TW) microchip that is the brains of the machine =
may not=20
be known to users familiar with Intel Corp.(Nasdaq:INTC)'s=20
Intel inside marketing campaign and Intel rival Advanced Micro Devices =
Inc=20
(NYSE:AMD).=20
The same hardware system with Windows and a modem costs $100 =
more, while=20
companies like eMachines Inc.(EEEE.OB), which specialize in low-end =
computers,=20
offer $399 machines with Windows, low-end chips from AMD or Intel, a =
bigger hard=20
drive and extra hardware such as a modem or CD-write drive.=20
Gary Elsasser, vice president of technology at eMachines, said =
that=20
consumers wanted to be able to run any software and find computer help =
easily.=20
Linux makes that hard to do.=20
''When you switch operating systems, millions of programs no =
longer work.=20
The person next door can't help you,'' he said.=20
EMachines annually sells about 400,000 computers at $399 each, =
Elsasser=20
said.=20
Freedom -- from Microsoft -- is a chief reason that consumers =
would buy a=20
Linux-based machine, said Jason Spisak, marketing director of Lycoris, a =
nine-person start-up and one of two companies supplying Wal-Mart with an =
operating system for the $199 machines. The other, also Linux-based, is =
Lindows.=20
Spisak says his Desktop/LX software is modeled to look like =
Windows XP.=20
''We've basically taken this as far as you can go without being =
prosecuted,'' he=20
said.=20
With new word processing and other office software on the way, =
and based=20
on the open office system successfully developed by Sun Microsystems =
Inc. for=20
Windows, Linux and other operating systems, Lycoris machines are good =
for light=20
word processing, Web surfing and e-mail, which is 90 percent of what =
people use=20
computers for, Spisak said.=20
''These (computers) are getting closer to an appliance,'' that =
will=20
satisfy new users and power users wanting a second machine, he argued.=20
''We're looking at a consumer who has less sophisticated needs,'' =
he=20
said