The company said Monday that this quarter it sold out of existing inventory of its iPaq Home Internet Appliance and does not plan to make more of the Web-surfing gadgets.
Compaq said it plans to introduce a new generation of non-PC Internet access products later this year, but it would not offer specifics or say why it has discontinued the previous product.
"We are working on the next generation of Internet access devices," said Compaq spokesman David Albritton. "We are looking at the feature set...for that device."
The discontinued line included two products, both designed to connect to the Internet using Microsoft's MSN Internet service. The flat-panel IA-1 was introduced in August 2000, and the IA-2, a cheaper model with a traditional monitor, was introduced in November 2000.
Albritton would not say how many of the Web-surfing gadgets it sold or what features it plans to add to the upcoming devices.
Compaq initially marketed the Net appliances to so-called technology newbies, but later changed gears to pitch the machines as ideal for families that already had a computer.
"We first marketed toward people who we thought were technology averse," Albritton said. "We found over time it was the perfect complementary device to the PC."
Compaq is the last of the big-name technology companies selling a Web-surfing appliance. Among those who have bowed out over the past 18 months are Sony, 3Com, Netpliance and Gateway.
However, New Internet Computer Co., a company backed by Oracle CEO Larry Ellison, said Monday that it had inked a deal to sell its Linux-based devices to older Americans in a deal with Internet service provider Senior Explorer.