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Makers of cheap machines flock to Be

The BeOs attracts makers of ultra-cheap computers that are hoping to avoid the "Microsoft tax."

Be Incorporated appears to be gaining popularity as a way for computer makers to build an ultra-cheap computer without paying the "Microsoft tax."

Last week, Microworkz and later iDot announced cheap machines running BeOS from Be Incorporated. America Online is discussing cross-marketing opportunities with Microworkz's iToaster, the company's Be box.

Meanwhile, at the other end of the price spectrum, AST Research announced Be-based multimedia machines with 550-MHz Penium IIIs for $1,999.

The strategy mirrors that of some makers of inexpensive computers based on the Linux operating system, which can be obtained at no charge. The Linux Store chief technical officer John Wise has said the $85 cost for a license of Windows is second only to the cost of the hard disk when his company builds its inexpensive Linux machines. In general, Windows is one of the rare elements of a PC that has not plummeted in price over the past two years.

In February, Be chief executive Jean-Louis Gassee issued a challenge to computer makers to install BeOS for free, but there were no takers, illustrating Microsoft's firm grip on the industry, said Frank Boosman, vice president of business development at Be.

"It's not an offer we continue to this day," Boosman said. Although the company has never signed a deal to give BeOS away for free, "pricing certainly is more aggressive than Windows," Boosman said.

One reason for using BeOS is crashproofness, he added, because technical support calls cost a lot of money. "At $199 [the cost of the iToaster], that's a big issue. If a CD player crashed, and you had to spend an hour on technical support, CD players would not cost what they do today," he said.

BeOS has been around for several years, but has been struggling to emerge as a mainstream alternative to Windows or Mac OS. It got a large publicity boost in 1996 when Apple considered using Be for a next-generation operating system, a decision the company abandoned in favor of buying Steve Jobs' Next Software.

When Be announced its IPO plans in May, it stated that one of its intentions was to push into the set-top box market, one of several areas Microsoft is hoping will be a home for its Windows CE operating system.

Be has a powerful ally in the form of chip giant Intel, which took a 10 percent stake in Be in November 1998.

The investment dovetails neatly with Intel's effort to be the "unifying architecture"--providing chips for all different operating systems. The philosophy has led Intel away from its tight coupling with the Windows operating system, and Intel now spends money on several varieties of Unix and its upstart cousin Linux.

Be works on chips from Intel and Motorola PowerPC.

IDot's BeOS boxes, which will begin shipping July 26, cost about $500 including a 333-MHz Cyrix chip, 32 MB of memory, 3.2 GB hard disk, and CD-ROM drive. A 15-inch monitor costs another $129, the company said.

Microworkz' iToaster is even cheaper. At $199, it has no CD-ROM drive, floppy drive, or monitor. AOL is negotiating with Micorworkz about co-marketing options on this machine, according to Microworkz chief executive Rick Latman. Along with being cheap, the iToaster could bring another advantage to AOL: it is very difficult to switch connectivity providers.

BeOS comes with its own email client, Web browser, and other software.

In addition to selling BeOS computers, iDot said it will set up a Web site for selling Be software.

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