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IBM ups the ante in Net appliance game

Hoping to revitalize its sagging PC business, Big Blue unveils a new line of computers featuring integrated flat-panel monitors, simplified controls and touches of snazzy industrial design.

Hoping to revitalize its sagging PC business, IBM unveiled a new line of computers today featuring integrated flat-panel monitors, simplified controls and touches of snazzy industrial design.

Dubbed NetVista, the new line of PCs, which actually won't be shipping until May, is the latest entry in what could be called the fancy PC revolution. Following the success of Apple's iMac, several computer companies started to acknowledge the importance of style and simplicity in capturing market share.

IBM will have to go a long way convincing customers that NetVista has the wherewithal to meet their expectations, said Roger Kay, an analyst at International Data Corp., who warned that brand transitions can be tricky.

"NetVista is like an empty vessel that IBM must fill," he said. "It's just a brand with a promise, and it's up to IBM to fill it with meaning over a period of years."

The trend toward style has also invaded the corporate market, but for reasons beyond looks. Because they are smaller, these PCs typically cost less to make. Centralized management and other features also cut management costs. Compaq has launched a nationwide TV campaign for its iPaq, and IBM will follow with its own $100 million campaign. Like IBM, Compaq lost money in the past year on its corporate PCs.

Although IBM is coming to this market later than others, the company can't be cited for lack of variety. The NetVista line will be marketed to corporations and consumers, rather than simply a single market as other manufacturers are currently doing. The NetVista line, in fact, will replace the Aptiva and corporate PC lines over time, the company said. Initially, the company will market four basic models, with variations on processor speed and configuration within each model group. Three of the new computers will come with integrated monitors while the fourth will come with an easy-to-attach monitor. All will come in matte black.

"If you look at personal computing today, it's anything from personal," said Carla Davison, IBM's vice president of desktop systems marketing. "(NetVista) is about simplified computing in a connected environment."

The company is looking to NetVista to recharge its PC division. The company has been losing millions on desktop computer sales. Early this year, IBM pulled out of retail sales to concentrate on Web sales. The Armonk, N.Y.-based computer maker has leaked details about the new PC line in recent months, but kept the name, pricing and availability secret. NetVista is part of IBM's EoN, or "edge of network" initiative, a marketing/technology effort under which Big Blue is promoting not just its products but its ability to tie technology together in a seamless Web.

IBM will initially introduce four versions of NetVista: an all-in-one model built around an LCD display; a legacy-free model with an attachable monitor; a network Internet appliance sold by telcos and others for home use, such as the one recently adopted by Fidelity Investments; and a network computer attached to an LCD display.

Pricing is still not set for any of the models, although the NetVista All-in-One will sell well below $2,000 with a Celeron processor and around $2,000 with a Pentium III chip, according to sources close to IBM. Starting models will feature a 533-MHz Celeron or 600-MHz Pentium III processor, 64 MB of RAM, 20-GB hard drive, CD-ROM or DVD drive, five USB ports and 15-inch LCD display.

The All-in-One, which measures a scant 16 inches by 16 inches by 10 inches, is about 75 percent smaller than typical computers. The guts of the computer are lodged behind the screen. Another interesting touch: a DVD-ROM drive is hidden behind the monitor and drops down when needed.

While the All-in-One is the flagship model of the new line, the more commonly seen computer might be the "Legacy-Free" model. This is a more basic computer that will compete directly against the new wave computers from Compaq and HP. As with the iPaq, Legacy-Free will start around $500, but IBM is betting extras, such as a 256-bit encryption chip, will appeal to large corporations.

What Davison calls "the poster child for EoN," the NetVista Zero-Footprint Thin Client is a network computer attached to an LCD display. Most network computers run all software off a server rather than a local hard drive, but the Zero-Footprint model is capable of both.

The final model, the NetVista Internet Appliance, differs in many respects from the others. Rather than selling it directly to businesses or consumers, IBM is focusing on service providers, such as telcos, brokerages and supermarkets, which would then sell, lease or give away the product to their customers.

Fidelity Investments last month committed to using the Internet Appliance, which is built around a 10-inch LCD display, and IBM last week cut similar deals with Bell Atlantic and SBC Communications.