AT&T; Ready to Combat IBM With New PC
AT&T; plans finally to unveil its second personal office computer Tuesday, a machine intended to challenge the troubled top-of-the-line entry of IBM.
American Telephone & Telegraph Co. is also announcing a relatively inexpensive system that connects the new PC 7300 computers so that they can “talk” to each other. But AT&T; apparently isn’t yet offering what some analysts believe the 7300 must have to compete--the ability to run software programs on the same operating system used by IBM.
“They want to see how it does in the market without it,” according to a consultant who has seen the new AT&T; equipment.
The 7300, originally scheduled for introduction last November, is AT&T;’s effort to take on IBM’s AT personal computer. Both are priced in the $5,000-plus range and offer significant computing power for office use.
However, IBM curtailed shipments of the AT early this year, apparently because of problems with some parts. Dealers are “still on allocation,” the company said last week, and they now report a six-week delay in delivery.
If the problems continue long enough for AT&T; to produce plenty of its 7300 machines, the shortages could create an opening for the 7300 with some customers, analysts said.
Meanwhile, Texas Instruments is scheduled today to introduce its latest entry in the personal office computer field, a machine that is also designed to rival IBM’s AT system.
The TI Business Pro offers features not yet available from IBM, a fact that Texas Instruments is promoting even though its machine won’t be available for shipment until at least June. Among them will be the ability to link as many as 50 other personal computers and three printers to the Pro in a “local area network” serving an entire small office. Unlike AT&T;’s offering, the Pro will be able to run software programs on the same operating system used by IBM.
Despite its features and timing, at least one analyst doubted that the Pro would make a permanent dent in IBM’s dominance in the personal office computer market. “This might be a good business for TI for a year or so,” noted Aharon Orlansky of Sutro & Co. in San Francisco, “but by next year the AT will be peaking, and TI will be having difficulty keeping up.”
AT&T; went into the computer business last year after being freed to do so by its court-ordered breakup. It was seen as a logical move for the telecommunications giant because growth of the information business has created a natural link between the computer and communications industries.
In addition to selling commercially the minicomputers it had been making for internal use, the company introduced a personal computer called the 6300 that was basically a clone of the successful IBM PC. But 1984 sales of the 6300 barely reached one-third of AT&T;’s modest goal of about 60,000.
AT&T;’s computer business is “not going to take off like a skyrocket,” said analyst Frank Governali of Kidder, Peabody & Co. “They’ll have to make their market slowly and incrementally.”
Company officials have said they’d like their fledgling office-automation business to grow at least 30% a year. At that rate, sales would reach about $1.1 billion in 1989--a mere 1.5% of AT&T;’s expected $70 billion in revenue that year.
“It’s important to them in the long term but not that much in the short term,” Governali said. “People lose sight of how big a company it is.”
Company officials have acknowledged marketing and other glitches last year amid the chaos surrounding the divestiture. Its computer-systems unit has since been reorganized under former IBM executive James D. Edwards.
Analysts say the 7300, though it was built for AT&T; by Convergent Technologies Inc. of Redwood City, Calif., also bears the research imprint of Bell Laboratories. As such, it is more an AT&T; product than its first personal computer and is designed for the firm’s long-term strategy to move gradually into the office-automation business. It also has a built-in telephone.
The company is also expected to introduce a low-cost “networking” system that would connect personal computers to one another using existing office phone lines. Analysts said it would cost as little as one-fourth the $800-per-terminal charge for IBM’s network.
The 7300 uses the company’s own Unix operating system (the set of internal instructions), which lends itself more readily to simultaneous use by several people than do other operating systems. IBM’s AT, for instance, can only be hooked to two other terminals while the 7300 reportedly can serve as many as nine at the same time--a potentially big cost saving.
The drawback of the Unix system is that fewer software programs will run on it than on the MS-DOS system used by IBM machines, though numerous software publishers, including Culver City-based Ashton-Tate, are poised to unveil programs Tuesday in support of the 7300.
Times staff writer Carla Lazzareschi also contributed to this story.
