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IBM expands NetVista PC brand

In an important step, Big Blue rebrands its business line of PCs as it shifts to a new commercial computer strategy.

IBM today rebranded its business line of PCs as the company shifts to a new commercial computer strategy.

While the Armonk, N.Y.-based company plans to continue selling existing IBM PCs, most new models will come under the NetVista brand unveiled last month.

The rebranding is an important step forward as IBM attempts to right its struggling PC systems group.

"NetVista has great potential, and I think there's good execution there and they're delivering a lot of value," Technology Business Research analyst Bob Sutherland said.

Officially, IBM's position is that the IBM PC brand name will not be phased out--at least in the short run.

"We have a lot of customers that love that platform. We're going to keep these two products as companion lines," said Doug Oathout, IBM's desktop product manager. "If we add all the (NetVista) attributes to all of our products, we might call them NetVistas, but we're not sure yet."

But sources familiar with NetVista said the brand would replace the IBM PC 300GL and 300PL brands as the company introduces new models.

Analysts forecast a big turnaround in IBM's overall PC operations, with the NetVista line driving a more connected computing strategy, streamlined manufacturing and increased direct sales.

Hard times have been plentiful for IBM lately. The hardware giant withdrew from retail stores Jan. 1 and spent the first quarter retooling its PC operation for NetVista. The price for the change in direction was steep. Aptiva consumer PC sales plummeted 45 percent during the first quarter, and commercial PC sales dropped 30 percent during the same period.

But analysts forecast that with the internal changes and the renewed vigor NetVista brings to IBM's PC sales, the company could turn its money-losing PC division into a profitable one early next year. Merrill Lynch forecasts the division will lose $50 million this year, compared with $571 million in 1999.

While IBM's rebranding may be good for the future commercial PC sales, it could present short-term problems.

"It is my understanding IBM has quite a backlog of existing PC 300s right now," Sutherland said.

Big Blue today introduced three new NetVista models, A20, A40 and A40p. Unlike others carrying the name, the new PCs are more like traditional business PCs. The NetVista X40i, an all-in-one model built around an LCD display, has come to define the PC brand in IBM advertising and Web promotions.

IBM NetVista A40p "IBM is taking some of the design of the new NetVista and incorporating some of the features they had on the PC 300 and adding a couple more," Sutherland said.

The new NetVista models, like their predecessors, are designed to incorporate IBM's EON, or edge of the network, approach to designing PCs. Models under the brand come standard with network cards and other technologies for cable, phone-line or wireless connection to networks and the Internet.

The NetVista A40 and A40p are available as standard desktop PCs or in a small-form factor version, with the A40p adding security features, such as an embedded security chip. The A20 is IBM's cut-rate model. All three models are available in white or NetVista's signature gray.

The NetVista A20 starts at $711 with a 533-MHz Celeron processor, 64 MB of RAM, 10-GB hard drive and Windows 98. The entry-level A40 comes with a 733-MHz Pentium III processor, 64 MB of RAM, 10-GB hard drive, 40X CD-ROM drive and Windows 98 for $1,248. The A40p starts at $1,352, configured similarly to the A40 but with an embedded security chip, manageability software and other extras. All models come with a 10/100 network card.