IBM Unleashes a Flurry of Clone-Fighting Actions : * Technology: It releases a computer-on-a-chip and “multimedia” products. It also slashes prices on many PCs.
Battered International Business Machines served notice Thursday that it’s pulling out all the stops in an effort to preserve market share in the face of a continuing assault from vendors of IBM-compatible PCs.
The world’s largest computer company, suffering from slumping sales and a precipitous falloff in profitability, introduced a high-performance version of a key computer-on-a-chip and cut prices on many of its PCs. Big Blue also rolled out, as expected, a broad line of “multimedia” products for integrating sound and video into computers.
The new chip is a variation on Intel’s popular 386 microprocessor. But IBM’s 386, which it is allowed to produce only for its own use thanks to a special arrangement with Intel, operates at nearly twice the speed of Intel’s model.
Initially, the new chip will power IBM’s new $6,000 multimedia computer, which also features a device for playing special discs called CD-ROMs as well as sound capabilities and special software. But IBM executives said the new chip will be used in many other PC products in the future.
Although Intel has the right to produce 386 chips based on IBM’s design, an Intel spokeswoman said the company didn’t plan to do so at this time. That means that any customer seeking the speed advantage the chip offers will have to buy a computer from IBM.
IBM’s multimedia strategy also represents an effort to put some distance between itself and the pack of clones. While software vendor Microsoft, IBM’s onetime ally turned bitter rival, has joined with Tandy and other PC clone vendors to promote a standard called MPC for integrating sound and video, IBM has gone its own way.
The IBM multimedia PC, which along with a series of other products will be sold under the brand name Ultimedia, uses a more advanced format for the compact disc player than the MPC machines. It is also designed to use software features that will be incorporated into the long-delayed new version of IBM’s OS/2 operating system, rather than similar features in Microsoft’s Windows program.
And the Ultimedia line includes a series of options that give it far more capabilities than competing products. Special video accessories will convert video images to the digital code of computers yet still provide TV-quality pictures. Another attachment will add traditional “analog” TV to a computer for $500.
Michael Braun, vice president in charge of multimedia at IBM, noted that the products were aimed at IBM’s stronghold in the business, government and education markets rather than at consumers. “We think this is the sweet spot in the market,” he said, adding that IBM considers multimedia a major growth area and that “we’re going to be the leaders.”
Even as it tries to push the technology ahead of the competition, IBM is also looking over its shoulder to try to stay competitive. The company said Thursday that it was cutting prices from 10% to 40% on a wide range of personal computers and accessories.
