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Digital Unveils Revamped Computers : Technology: But some analysts are skeptical. They say customers are waiting for powerful, new-generation machines due later this year.

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From Associated Press

Digital Equipment Corp., struggling through hard times, unveiled a revamped computer line Tuesday to woo hesitant customers who are waiting for more powerful machines due later this year.

But some analysts were skeptical about seeing a quick revenue gain for the nation’s second-largest computer maker, which is expected to report another quarterly loss for the three-month period that ended in June.

“This is a product announcement made out of desperation, it seems,” said John Logan, an analyst with Aberdeen Group, a market research firm in Boston.

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Before the end of 1992, Digital expects to roll out a new generation of computers based on a high-powered chip called Alpha developed by the company. Analysts say customers are waiting to see the Alpha-based computers and so have withheld buying machines based on Digital’s traditional VAX technology.

But the new VAX line announced Tuesday aims to reassure customers that they can migrate to Alpha machines even if they make their computer purchases now, said Kevin Rudden, a Digital spokesman.

“A lot of customers say, ‘I don’t want to buy today if this is going to be obsolete in six months,’ ” Rudden said.

Customers who buy either of two new, high-end machines, the VAX 7000 and VAX 10000, will be able to transform them into Alpha systems simply by switching a computer circuit board, Rudden said.

Customers who buy other VAX machines will be able to trade them in for Alpha systems at a guaranteed price. This offer had been in place earlier for certain computers, but Digital expanded it, Rudden said.

In addition, Digital has improved the VAX computers to make them faster and cheaper, he said.

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But John Levinson, an analyst with Goldman Sachs & Co. in New York, noted that Digital last fall made a similar announcement with a line of juiced-up VAX computers.

That line failed to turn around Digital’s fortunes, and the company posted two consecutive quarterly losses totaling $432 million. Digital officials have said they are considering taking a charge against earnings of up to $1 billion to cover the cost of thousands of anticipated layoffs.

This would be the third year in a row that Digital, based in Maynard, Mass., embarks on a major cost-cutting program. The actions have been prompted in large part by troubles in the VAX line, which propelled Digital to great heights in the 1980s before faster, cheaper technologies emerged.

Digital hopes to recapture the technological lead with its Alpha microprocessor, although some analysts question whether it can become the company’s savior.

Also, despite Digital’s offer of an upgrade program, customers still might be nervous about making a big computer purchase knowing that the system could require technical alterations within a year, analysts said.

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