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IBM beefs up consumer strategy

Big Blue floods the consumer market with five new PCs and three new notebooks, all of which have been primed for easy Internet access.

IBM kicked off the Computer Electronics Show in Las Vegas with five new Aptiva systems and three new consumer notebooks, all of which have been primed for easy Internet access.

The new machines reflect IBM's improving fortunes in the consumer arena. After a disastrous 1997 when the company missed the sub-$1,000 revolution, IBM has revamped its product line and made its machines more cost-competitive. Sales since then have risen, according to various analysts.

The five new Aptiva desktops, which range in price from $999 to $1,699, come with keys for easy access to the Internet, according to the company. IBM has struck deals with Yahoo, Excite, and others that allow Aptiva users to connect to the Internet through a keystroke. The deals are similar to those struck by other computer vendors.

Lycos, which also signed a deal with IBM to provide personalized start pages for Aptiva owners, jumped $5.5, to close at a 52-week high of $71.5 today.

In addition, IBM is offering a quick way to buy software online through a deal with Chumbo.com. During the ownership registration process, users are directed to Chumbo.com, an electronic software reseller, where they can set up a personalized account.

The new Aptivas contain Pentium II processors from Intel running at 350 MHz and 400 MHz or K6-2 processors from AMD running at 400 MHz.

The three new notebooks, all part of the ThinkPad i series, essentially enhance the technological features in IBM's consumer line. The ThinkPad 1411, 1451, and 1721 all come with 14-inch screens and 300-MHz Pentium II processors, faster than the processors offered in previous models. The ThinkPad 1721 is also the first IBM consumer notebook that comes with an optional DVD-ROM drive. Prices range from $1,599 to $2,999, depending on the configuration.

IBM is intent on trying to hit multiple points on the price/performance continuum, according to Adalio Sanchez, general manager of IBM's mobile computing group. Price remains the number one consideration for notebook buyers in the consumer market. With the new machines, IBM cut prices on existing consumer ThinkPads. The lowest price configuration now sells for $1,499, a fairly rare price point for any manufacturer six months ago.

"We've changed the perception in the marketplace that [the ThinkPad] was not affordable," Sanchez said.

Nonetheless, consumers remain fairly particular about design and features. The addition of the 14-inch screen comes as a result of customer surveys that show that 68 percent of notebook purchasers said they wished they had bought a bigger screen.

Later in the quarter, IBM will release a "Jupiter" Windows CE device that is roughly the size of a mini-notebook, Sanchez added.