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Toshiba joins Net PC rush

Net PC-class systems for the corporate market are due in the first half of 1998.

Not to be left out of the stampede, Toshiba announced today that it would ship Net PC-class products and servers for the corporate market in the first half of next year.

A perennial presence in the corporate market with its notebooks, Toshiba has been trying to expand its overall computing lineup since the beginning of the year. In March, the company rolled out its Equium line of desktop computers, following the debut of its consumer desktops in September 1996. Toshiba has not rolled out servers as such to date, though their higher-end desktops could be used in that capacity.

"Net PC-class products will be a critical component in our total enterprise solutions strategy," said Jeffrey Friederichs, vice president of worldwide marketing. "We have already announced our intent to become an enterprise-wide solutions provider and will deliver servers in the first half of 1998."

Toshiba's emphasis on servers over the Net PC unit itself points out how manufacturers plan to eke out a profit from the low-cost, low-administration machines. The profit margins will come through sales of back-end systems and the services that go along with installing them, not necessarily the Net PC.

"Do you think [PC manufacturers] can make a lot of money off Net PCs? I don't think so," asked a rhetorical Bruce Stephen, an analyst at International Data Corporation, a marketing research firm in Framingham, Massachusetts. Other manufacturers have begun to chant the back-end mantra as well.

Net PCs are "sealed-case" computers managed from a central server. Proponents claim the Net PC will cut corporate computing costs by allowing software to be updated electronically from a central location. Net PCs are also expected to be less costly than desktops.

That, however, appears to be a fading promise as most manufacturers are choosing to incorporate higher-end Pentium or Pentium II processors into their Net PCs. The boxes will likely cost $1,000 and up, the price of a low-end desktop.

"These things aren't coming out as cheap as some people hoped," commented Roger Kay, a senior analyst at IDC.

In other announcements, Toshiba rolled out an enhanced version of its Noteworthy Business Video Phone, which will support version 2.0 of Intel's (INTC) ProShare technology. The Noteworthy system includes a color analog camera and sells for $399. The system will be available as an accessory to various Toshiba notebooks.