IBM to Market PC With Fast New Intel Chip by Year End

International Business Machines scored a public relations victory Tuesday by becoming the first company to announce a personal computer containing the next-generation microchip from Intel Corp.

The computer will not be entirely new, and it will not be available until the end of the year, but analysts saw it as a psychological victory for IBM, which has been upstaged repeatedly by its rival, Compaq Computer.

“Compaq must really have bugged them. They have gotten tired of Compaq beating them to the market with the latest chip or the fastest chip,” said Jonathan Seybold, publisher of Seybold Reports in Malibu.

“This is a shot across the bow from IBM, that’s about it,” said Richard Shaffer, editor of Computer Letter in New York.

IBM said it will sell a $3,995 circuit board containing Intel’s new i486 chip. The board will replace the microprocessor in one of IBM’s Personal System-2 Model 70-A21 computers, making it run twice as fast as the fastest personal computers available today, IBM said.

The circuit board will go on sale as soon as the chips are available from Intel, which is expected to be the final quarter of this year. The price of the computer they go into was cut to $8,995 from $11,295.

Compaq said the announcement is unimportant because the computer the new chip will go into--the Model 70-A21--lacks the memory capacity and room for add-on equipment that Compaq’s own high-powered models have. The limitations mean the computer cannot take full advantage of the new i486 chip’s power for such jobs as computer-aided design and engineering.

Compaq faulted IBM for announcing the product before it is ready. It is “absolutely” possible that Compaq will begin delivering a computer based on the i486 chip before IBM does, Michael Swavely, the president of Compaq North America, said in an interview.

“Who announces first really doesn’t matter a whole lot,” Swavely said.

In contrast, Robert Carberry, IBM’s vice president for systems in the personal computer organization, said, “I think we’re very well positioned” to be the first to deliver a computer based on the i486.

The Model 70-A21 was selected as the first housing for the i486 chip because its design allows it to accept different microprocessors easily. IBM said other members of its PS-2 family would also be equipped with the new chip over time, although the upgrade will be more complex.

Ever since Compaq brought out the first 80386-based personal computer in 1986, IBM has been trying to catch up in unit shipments of those machines, which are the most powerful IBM-compatible ones currently on the market.

IBM may hit No. 1 in the segment in the current April-June quarter, David Thomas, president of IBM’s national distribution division, said in an interview Tuesday.

Analysts said that regardless of the technological significance of IBM’s announcement, they admired the competitive zeal IBM was displaying.