New "Net-centric" IBM consumer computers offer fast modems, online services, and Web-based help, part of a growing trend among PC makers such as Compaq and Hewlett-Packard, which have recognized the Internet's value for their home PC offerings.
The $799 Aptiva E2N features a 266-MHz K6-2 processor from Advanced Micro Devices and sports a 4GB hard drive and CD-ROM drive. The $999 Aptiva E3N features a K6-2 300-MHz AMD processor, 64MB of memory, a 6GB hard drive, and a CD-ROM drive.
Plummeting component prices and better inventory control are making it possible for IBM to sell low-end PCs more profitably than before, according to IBM executives.
"It takes everything--velocity and speed of execution and management of inventory. Once it [a PC] gets in, if it's not sold to an end user it's like bread: It gets old and moldy," said Brian Connors, vice president of at the Aptiva group at IBM.
The high-end Aptiva E5D, which ships with Windows 98, is priced at $1,799 and runs on a 400-MHz Pentium II processor and features a DVD-ROM drive and IBM's Via Voice 98 speech recognition software. "This is a comeback for us in the high end of the market," Connors said.
The E5D also features high-end Accelerated Graphics Port (AGP) 3D graphics technology, a 56-kbps modem, and a fast 100-MHz bus, allowing the processor to "talk" to components at almost twice the speed of current system buses. "We've learned that the market wants us to be back in at the higher end," he said, referring to Big Blue's recent emphasis on less-expensive consumer PCs.
Interestingly, the new Aptiva E series offer Ethernet networking cards as an option, allowing users to plug into super-fast Internet connections like cable modems and ADSL lines, which offer speeds that are many times that of the fastest dial-up modems.
Ethernet connections are now popular in college dorms, noted Connors. "To be on college campuses, you have to access for Ethernet cards. There is demand for it right now," he said. The E series computers also come with 56-kbps modems.
Meanwhile, the new systems' free Web-based help extends to users who have not signed up with an Internet access service. "Without even having an ISP, you can get service and support. If you don't have an account, we'll dial you in."
Users can also choose between America Online and IBM's own Internet service. Big Blue offers both Microsoft Internet Explorer browser and Netscape Navigator browser on all systems, Conners said. "We have set up both AOL and IBM's Global Network, AOL being a more 'turnkey' solution for back-to-school."
Connors expressed cautious optimism about the new line's chances for success in the face of an unpredictable market. "Sometimes you see the bookends take off [the entry level and the high-end PCs], but we're also pretty well covered in the middle. I think you can always bet on prices to still drive down. We cannot expect the prices to go up and the $799 [PC] to go away, but at the same time, customers are looking for more value at the higher end."
Also today, IBM introduced the ThinkPad 385XD, its first Windows 98 notebook. Incorporating a 233-MHz Pentium MMX processor, the new ThinkPad comes with an 2.1GB hard drive, a 12.1-inch active-matrix screen, and a CD-ROM for $1,999. A 266-MHz Pentium II model with a slightly larger hard drive goes for $2,799.