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Compaq notebooks aim at small business

As Compaq finds it harder to grow sales to Fortune 500-type companies, it focuses elsewhere, on a previously unaddressed segment.

Compaq (CPQ) extended its line of small business offerings with new notebook PCs, in the hopes that smaller businesses will be able to take up the slack in corporate sales.

As Compaq and others find it harder to grow sales to Fortune 500-type companies, they are turning their attention to small businesses which have 100 employees or less, a market segement that has been left relatively unaddressed.

Last Friday, Compaq warned that its quarterly sales will likely come to $4.8 billion, a steep 34 percent drop from the previous quarter. The PC giant said the loss was mainly due to slow sales in commercial markets. (See related story)

Compaq has released new models in its Armada notebook line which include office software normally purchased separately. Since small businesses often have little or no support from information systems personnel, Compaq says it is offering one year of around-the-clock telephone support for hardware questions.

Questions about software applications are charged on a per-incident basis, the company says, with service available in "packages" of five, ten, and twenty five calls.

The Armada SB 5233 will come with a 233-MHz Pentium MMX processor, a 4GB hard disk drive, and 12.1-inch active-matrix color display for $3,599.

The Armada SB 5200DM will incorporate a 200-MHz Pentium MMX processor, 3.2GB hard disk drive, and a 12.1-inch dual-scan display for $2,499.

Both models include modems.

Compaq says the hard drives include technology for warning users of impending problems, so that they can repair or replace the devices before a loss of data occurs.

For Compaq, the new notebooks follow the introduction of servers and desktop PCs specifically aimed at the small businesses market. However, Compaq must go up against Hewlett-Packard which got an early jump on Compaq in this market, when it teamed up with Microsoft back in March of 1996. See related article.

Compaq must also vie with direct sales companies such as Micron and Gateway 2000 for this same market.

In related news, Compaq today introduced the Armada 1598DMT to its notebook lineup. The portable features a 266-MHz Pentium MMX processor, a 13.3-inch active-matrix display, and a 4GB hard disk drive for $3,799. A model with a 200-MHz Pentium MMX, a 12.1-inch dual-scan display, and a 3.2GB hard disk drive is available for $2,399 in the ?.S. market only.