A $199 PC with no Windows, no Intel inside

Sun, 15 Dec 2002 10:29:19 -0700

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A $199 PC with no Windows, no Intel inside
Reuters
Dec. 8, 2002 10:11 AM

LOS ANGELES - Here's the pitch for what could be your next PC: No =
Microsoft, no Intel -- and almost no markup.=20

By dropping software from Microsoft Corp.(Nasdaq:MSFT) and avoiding =
''Intel inside,'' retailer Wal-Mart Stores Inc.(NYSE:WMT) is offering a =
$199 computer it says is a hot seller on its Web site, attracting =
novices looking for a way onto the Internet as well as high-end users =
wanting a second box.=20

The promise of a PC replacement -- slimmed down to surf the Web and =
carry out limited tasks -- has long tantalized the tech world but failed =
to generate many sales, especially as prices of name brand computers =
have slid.=20

The Wal-Mart machines are full-fledged, if low-powered, computers, but =
they are not loaded with Microsoft's Windows software or the best known =
microchips -- meaning that the average user will not get exactly what he =
or she is used to.=20

''It is going to be harder to get people to adopt that sort of stuff'' =
since most consumers want Windows, concluded Roger Kay, a PC analyst at =
International Data Corp research group.=20

Although the Wal-Mart machine has a slower microchip than more expensive =
computers, rival machines may not surf the Web much faster, since the =
speed of the Internet connection is usually the bottleneck in online =
tasks, said Rob Enderle, an analyst at competing research group Giga.=20

''It is awfully hard to beat this for the price point,'' he said.=20

As Wal-Mart heads into its first holiday season offering the $199 =
machines, it says sales are already exceeding expectations.=20

''What we're finding is largely tech enthusiasts buying these items, but =
we've also seen some individuals, as well as businesses and some =
schools,'' said spokeswoman Cynthia Lin. She declined to quantify sales, =
although knowledgeable sources put them in the thousands of units per =
month.=20

BROADBAND MACHINES=20

The machines, manufactured by Microtel Computer Systems, aim to provide =
an experience similar to Windows by using operating systems based on the =
free Linux system. They support high-speed Internet (though the service =
itself is not included) and have a CD drive that can read music and data =
disks, but not record them.=20

They also have relatively small hard disk drives of 10 gigabytes.=20

There is no modem, floppy disk drive, or monitor, and the VIA =
Technologies Inc. (2388.TW) microchip that is the brains of the machine =
may not be known to users familiar with Intel Corp.(Nasdaq:INTC)'s Intel =
inside marketing campaign and Intel rival Advanced Micro Devices Inc =
(NYSE:AMD).=20

The same hardware system with Windows and a modem costs $100 more, while =
companies like eMachines Inc.(EEEE.OB), which specialize in low-end =
computers, offer $399 machines with Windows, low-end chips from AMD or =
Intel, a bigger hard drive and extra hardware such as a modem or =
CD-write drive.=20

Gary Elsasser, vice president of technology at eMachines, said that =
consumers wanted to be able to run any software and find computer help =
easily. Linux makes that hard to do.=20

''When you switch operating systems, millions of programs no longer =
work. The person next door can't help you,'' he said.=20

EMachines annually sells about 400,000 computers at $399 each, Elsasser =
said.=20

Freedom -- from Microsoft -- is a chief reason that consumers would buy =
a Linux-based machine, said Jason Spisak, marketing director of Lycoris, =
a nine-person start-up and one of two companies supplying Wal-Mart with =
an operating system for the $199 machines. The other, also Linux-based, =
is Lindows.=20

Spisak says his Desktop/LX software is modeled to look like Windows XP. =
''We've basically taken this as far as you can go without being =
prosecuted,'' he said.=20

With new word processing and other office software on the way, and based =
on the open office system successfully developed by Sun Microsystems =
Inc. for Windows, Linux and other operating systems, Lycoris machines =
are good for light word processing, Web surfing and e-mail, which is 90 =
percent of what people use computers for, Spisak said.=20

''These (computers) are getting closer to an appliance,'' that will =
satisfy new users and power users wanting a second machine, he argued.=20

''We're looking at a consumer who has less sophisticated needs,'' he =
said

 =
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<DIV>
<H2>A $199 PC with no Windows, no Intel inside</H2>
Reuters Dec. 8, 2002 10:11 AM
LOS ANGELES - Here's the pitch for what could be your next PC: No =
Microsoft,=20
no Intel -- and almost no markup.=20
By dropping software from Microsoft Corp.(Nasdaq:<A=20
href=3D"http://investor.cnet.com/investorpw/privatewire/azcentral/0-96657=
75-3-0-3-MSFT.html">MSFT</A>)=20
and avoiding ''Intel inside,'' retailer Wal-Mart Stores Inc.(NYSE:<A=20
href=3D"http://investor.cnet.com/investorpw/privatewire/azcentral/0-96657=
75-3-0-3-WMT.html">WMT</A>)=20
is offering a $199 computer it says is a hot seller on its Web site, =
attracting=20
novices looking for a way onto the Internet as well as high-end users =
wanting a=20
second box.=20
The promise of a PC replacement -- slimmed down to surf the Web =
and carry=20
out limited tasks -- has long tantalized the tech world but failed to =
generate=20
many sales, especially as prices of name brand computers have slid.=20
The Wal-Mart machines are full-fledged, if low-powered, =
computers, but=20
they are not loaded with Microsoft's Windows software or the best known=20
microchips -- meaning that the average user will not get exactly what he =
or she=20
is used to.=20
''It is going to be harder to get people to adopt that sort of =
stuff''=20
since most consumers want Windows, concluded Roger Kay, a PC analyst at=20
International Data Corp research group.=20
Although the Wal-Mart machine has a slower microchip than more =
expensive=20
computers, rival machines may not surf the Web much faster, since the =
speed of=20
the Internet connection is usually the bottleneck in online tasks, said =
Rob=20
Enderle, an analyst at competing research group Giga.=20
''It is awfully hard to beat this for the price point,'' he said. =

<P></P>As Wal-Mart heads into its first holiday season offering the $199 =

machines, it says sales are already exceeding expectations.=20
''What we're finding is largely tech enthusiasts buying these =
items, but=20
we've also seen some individuals, as well as businesses and some =
schools,'' said=20
spokeswoman Cynthia Lin. She declined to quantify sales, although =
knowledgeable=20
sources put them in the thousands of units per month.=20
BROADBAND MACHINES=20
The machines, manufactured by Microtel Computer Systems, aim to =
provide=20
an experience similar to Windows by using operating systems based on the =
free=20
Linux system. They support high-speed Internet (though the service =
itself is not=20
included) and have a CD drive that can read music and data disks, but =
not record=20
them.=20
They also have relatively small hard disk drives of 10 gigabytes. =

There is no modem, floppy disk drive, or monitor, and the VIA=20
Technologies Inc. (2388.TW) microchip that is the brains of the machine =
may not=20
be known to users familiar with Intel Corp.(Nasdaq:<A=20
href=3D"http://investor.cnet.com/investorpw/privatewire/azcentral/0-96657=
75-3-0-3-INTC.html">INTC</A>)'s=20
Intel inside marketing campaign and Intel rival Advanced Micro Devices =
Inc=20
(NYSE:<A=20
href=3D"http://investor.cnet.com/investorpw/privatewire/azcentral/0-96657=
75-3-0-3-AMD.html">AMD</A>).=20

<P></P>The same hardware system with Windows and a modem costs $100 =
more, while=20
companies like eMachines Inc.(EEEE.OB), which specialize in low-end =
computers,=20
offer $399 machines with Windows, low-end chips from AMD or Intel, a =
bigger hard=20
drive and extra hardware such as a modem or CD-write drive.=20
<P></P>Gary Elsasser, vice president of technology at eMachines, said =
that=20
consumers wanted to be able to run any software and find computer help =
easily.=20
Linux makes that hard to do.=20
<P></P>''When you switch operating systems, millions of programs no =
longer work.=20
The person next door can't help you,'' he said.=20
<P></P>EMachines annually sells about 400,000 computers at $399 each, =
Elsasser=20
said.=20
<P></P>Freedom -- from Microsoft -- is a chief reason that consumers =
would buy a=20
Linux-based machine, said Jason Spisak, marketing director of Lycoris, a =

nine-person start-up and one of two companies supplying Wal-Mart with an =

operating system for the $199 machines. The other, also Linux-based, is =
Lindows.=20

Spisak says his Desktop/LX software is modeled to look like =
Windows XP.=20
''We've basically taken this as far as you can go without being =
prosecuted,'' he=20
said.=20
With new word processing and other office software on the way, =
and based=20
on the open office system successfully developed by Sun Microsystems =
Inc. for=20
Windows, Linux and other operating systems, Lycoris machines are good =
for light=20
word processing, Web surfing and e-mail, which is 90 percent of what =
people use=20
computers for, Spisak said.=20
''These (computers) are getting closer to an appliance,'' that =
will=20
satisfy new users and power users wanting a second machine, he argued.=20
''We're looking at a consumer who has less sophisticated needs,'' =
he=20
said</DIV> &nbsp;<A=20
href=3D"http://www.azcentral.com/business/articles/1209TECH-COLUMN-PLUGGE=
DIN-DC.html">http://www.azcentral.com/business/articles/1209TECH-COLUMN-P=
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