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IBM outlines ambitious post-PC plans

The "one-size-fits-all" computing model that has defined IBM's Personal Systems Group is dropping off as Big Blue experiments with designs beyond the standard "beige box."

The "one-size-fits-all" PC is dead, according to the high-tech behemoth that legitimized the personal computer industry in the 1980s.

That's essentially the message IBM delivered to industry analysts this week, when it outlined an ambitious strategy for moving beyond the PC era--way beyond.

Big Blue has essentially recognized the movement taking place across the industry. Gone will be the ubiquitous "one-size-fits all" computing that has defined IBM's Personal Systems Group, as it experiments with designs beyond the standard "beige box," including wearable PCs, and adding wireless connectivity to virtually all new products.

But despite the hype--seen most vociferously at the Comdex trade show--it's still far from clear if customers, especially traditionally staid corporate buyers, will react to these changes with the same enthusiasm that Silicon Valley has.

As previously reported, the cornerstone of IBM's new strategy is EON, which stands for "edge of the network." EON in a sense will be a combination of hardware, connections and services with an emphasis on IBM's ability to tie disparate technologies together and tailor the package to customers' needs. IBM, in fact, will still make PCs, but sell them in a conglomeration with everything else, executives have said.

As with other companies, IBM is de-emphasizing the box because profit in the future will come from providing content, connectivity and services such as application hosting.

"[Profit] is not going to be in the hardware, long term. You will see the service component take on a larger role," said Ed Rodriguez, national industry director for the electronics practice at KPMG. Hardware makers will line up with service companies, he added, to devise all-encompassing technology solutions "under single-service agreements."

Momentum is building in this arena, and IBM isn't the first company to move in the direction of simplicity. Sun CEO Scott McNealy and Oracle CEO Larry Ellison have been talking about this for years, and the recent fascination with Internet appliances is breeding new PC-like devices, such as Compaq Computer's iPaq and the MSN Web Companion from Microsoft.

The EON unveiling will be in three stages, starting with a concept introduction through the first quarter of 2000. In stage two, dubbed "market demonstration," IBM plans to deliver a few new products and widely test many new non-PC designs.

Phase three, which Big Blue is calling the "paradigm revolution," will take place in the first and second half of 2001 as it brings many new, non-PC products to market.

Participants in this week's briefing were impressed with IBM's plan, but not with the extended timetable, said several analysts attending the event.

"IBM's vision is right on, and they have more pieces in place than any other vendor in the market," said Technology Business Research analyst Joe Ferlazzo. "If they can execute on an Internet timetable, they could be able to capture mind share and market share."

But Ferlazzo worried this might not happen. "In typical IBM fashion, they think they have to have this entire huge concept laid out and all the pieces in place before they bring anything to market."

Some analysts warned the firm that it needs to get some products to market so potential customers see proof it is indeed moving beyond the PC.

In response to these concerns, IBM said it would roll out one new EON product in advance of others, sometime in the spring. The official EON launch is not expected until the second quarter, possibly as early as April.

That first product will likely be an all-in-one PC built around a thick LCD display. Dell, Gateway and NEC have similar products on the market. But for Big Blue, the product will be a bold departure from the IBM PC, which has changed little since its introduction nearly two decades ago.

While early EON devices will merely be improved PCs--shedding legacy connectors and ports--others will boast new features, such as embedded security chips and support for wireless. IBM is betting big on wireless, this week entering into a long-term partnership with Sprint.

Big Blue will be testing a wide range of new designs throughout 2000, everything from wearable PCs to foldable screens and paper computers. IBM will also experiment with non-Windows operating systems as it moves beyond the PC.

IBM is still uncertain of its branding strategy. What Big Blue calls "stationary devices" makes up the initial EON line. But it may fold some devices, such as wearable computers, into its ThinkPad portable line. IBM typically brands any portable device weighing 8 pounds or less under ThinkPad.

IBM's wearable PC, developed in partnership with Olympus, is expected to reach the Japanese market early next year.'s Michael Kanellos contributed to this report.