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IBM aims notebooks at small-business market

Big Blue redirects focus from consumers to small businesses with a new line of iSeries ThinkPads.

IBM will expand the horizon of its consumer line of notebooks next week with new models that will be targeted more at small businesses.

IBM will release a new line of i Series ThinkPads that will be sold through dealers and directly over IBM's Web site, but not through retailers such as CompUsa. To date, all iSeries notebooks have been sold through consumer retail outlets

The 1500 line will use Intel Celeron processors running at 366 MHz, active- matrix screens as large as 14 inches diagonally, 4.8 GB hard drives, and a CD-ROM drive. Prices will range from $1,899 to $2,199.

"What they're doing isn't anything revolutionary. But the small-business market doesn't need anything extraordinary," said Brian Phillips, an analyst with ARS1. The price, he noted, is equal to $200 to $300 higher than competing products.

The ThinkPad i series is a "consumerized" version of the popular ThinkPad notebook targeted at business buyers. Although a shortage of LCD screens earlier this year prevented a predicted onslaught of cheaper consumer portables, most analysts predict that notebooks will begin to form a larger part of the consumer and home-office market.

Consumer notebooks largely differ from their corporate counterparts in price, software bundles, and whether or how features such as CD-ROMs or networking cards are included. To date, IBM has put less emphasis on the consumer market than some competitors.

IBM's focus on business dealers or "channel" partners is paramount, according to Phillips, as these companies serve as a conduit for products to the small business market. "It's more important to develop reseller relationships and strong channel relationships. Toshiba has done a really good job of developing ties with their resellers."

IBM has recently settled into the lower end of the top 5 in portable computer market share in retail. Toshiba recently regained the No. 1 ranking in the notebook market, according to a variety of market research firms. Compaq is No. 2. IBM has been jumping between the No. 3 and No. 4 positions.

"When compared to other products, the new IBM models range from competitively priced against Compaq and Gateway, to $200 to $300 higher than certain Dell and Toshiba models," Phillips said.

IBM has also been repositioning its Aptiva desktop line for the very small business market. What was once skewed heavily as a high-end PC enthusiast line is now mostly comprised of small business models.