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Compaq allies with Proxim for networking products

Compaq Computer is trying to get into every room in your house, a move that the company hopes will bolster its PC business.

LAS VEGAS--Compaq Computer is trying to get into every room in your house, a move that the company hopes will bolster its PC business.

Compaq announced an alliance with Proxim today at Comdex here that will allow it to start selling wireless home networking products by the first quarter of next year.

Proxim's technology, based around the HomeRF protocol for wireless Internet access, will be incorporated into Compaq's Presario consumer computers, the companies said. The combination allows users to create a wireless home network to share Internet connections and printers and files throughout the home, the companies said.

The move is part of the growing Internet appliance and home networking push that also comes at a critical time for the Houston-based computer maker. Compaq recently lost its leading market share in the United States to rival Dell Computer for the first time.

Starting in the second half of 2000, the joint agreement will provide technology to support more advanced communications, such as high-quality voice and audio communications, faster data rates and wireless Internet access outside the home, the companies said.

The wireless products released today come amid a flurry of activity to incorporate more wireless functions into standard computers. The exact implementation will vary from company to company, but wireless in some form or another will become relatively common as time goes on, said Frank Spindler, vice president of marketing for Intel's mobile product group.

Compaq has also formed a separate group, called the Internet Access Appliance Group, to focus on Net appliances for the corporate market.

The first device out of this group will be the small-scale iPaq computer. But it is also looking at other devices and at partnering with companies such as Philips and Nokia to come out with gadgets such as co-branded cell phones and wireless handhelds and pagers, said Jerry Meerkatz, vice president of Compaq's desktop PC division who is heading the new group.

The company sees big things in these devices.

These smaller Internet appliances could account for "20 percent of our volume in 2000," Meerkatz said. But it could be up to "50 or 60 percent of our business in the next two to three years.

"There's going to be no difference between a consumer and a corporate play going forward," he said.

Compaq plans to announce additional wireless technology tomorrow. The company will officially enter the Internet appliance market tomorrow night at a Comdex event, when the company is expected to show a device dubbed "Clipper" that consists of a wireless keyboard and a thin, rectangular monitor, sources said. The device, which will be demonstrated now and will ship later, will be positioned as a simplified conduit for Internet access and e-commerce.

If the company releases the new units as planned, it will chart two new business changes for Compaq. First, Compaq will actually be selling these devices in fleets to telcos and banks, and even manufacturing customized units for these customers. These large sales deals could prove lucrative, but it marks a turn in Compaq's strategy. The company will be functioning less as a standard consumer PC company--controlling nearly every aspect of the design and marketing of its products--and more like a contract manufacturer.

Comdex: Closing the millennium Sources close to Compaq also said the devices will not necessarily run on the Windows operating system. Sources said the appliance may run Linux or, more likely, SCO Unix. The device would be similar to Compaq's NeoServer, a closed-box device running SCO Unix and sold to small businesses looking for no-nonsense networking.

The all-in-one unit will contain a Celeron processor from Intel, sources said.

Compaq also will be releasing products next year so that users of its Aero handheld can access the Internet, said Frank Vareta, a product manager for the Aero line. Next year, the company will work with telcos to release connection cords that will allow consumers to hook the Aero to a cell phone and obtain data and network traffic, he said. Bridging devices like this came out in Europe but has not hit the United States yet, he added. Compaq is also looking at a wireless bridge as well as other technology that will allow the Aero to connect to the Internet without the phone.

One of the first products to be released will be a cordless Universal Serial Bus (USB) Adapter for Presario desktops, the company said.

"Compaq is leading the industry with PC products optimized for the 'e-lifestyle,'" Sean Burke, Compaq's vice president of Presario products, said in a statement. "Now with Proxim's HomeRF technology, our customers will have the flexibility and freedom to access the Internet anywhere they feel comfortable: on the couch, in the kitchen, on the patio or wherever they choose."