Toshiba Pins Its Desktop Hopes on All-in-One Machine

By GREG MILLER

Sept. 10, 1996 12 AM PT

TIMES STAFF WRITER

IRVINE —

If your home computer got hungry and gobbled up your TV, telephone, stereo and answering machine, you might end up with something like the Infinia, an all-in-one computer being introduced by Toshiba.

The question is whether consumers will gobble up the Infinia.

The new machine, to be unveiled today at a company-staged event at the Vanderbilt Mansion in New York, is what some consider a glimpse of a future in which computers will absorb not only the functions of other home electronics, but their look and feel as well.

The Infinia also represents a major strategic shift for Toshiba, a company that leads the market for portable computers but until now has been largely a spectator in the desktop wars.

The Japanese company, whose U.S. operations are based in Irvine, failed in its attempt to crack into the desktop business in the early 1990s, and beat a hasty retreat back to notebooks.

But if Toshiba was chastened by the experience, you wouldn’t know it from predictions being made by Tom Scott, general manager of Toshiba’s computer systems division.

“By the end of 1997, we’re going to be No. 5 in the entire PC market in the United States,” he said in a telephone interview Monday. “And in the year 2000, we’re going to be No. 3.”

The company is currently No. 8 in the U.S. computer market, based solely on the strength of its notebook sales.

Draped in black and aerodynamically sculpted, the Infinia certainly looks different from the egg-colored boxes traditionally turned out by PC makers.

The 17-inch monitor is framed between two large speakers. And what looks like the front panel of a car stereo--with a liquid crystal display surrounded by knobs and buttons--is mounted beneath the screen.

Toshiba’s engineers are particularly proud of this little display, which lets users control sound volume and switch from TV to PC to radio without having to use a mouse to navigate layers of software. There is also a remote control.

Toshiba officials said that by the end of the year, the Infinia will also be equipped to play digital video discs, or DVDs, which are the size of a compact disc but can hold eight times as much data. Toshiba is one of a number of companies counting on DVDs, which can store full-length movies, to replace videocassettes.

The Infinia is expected to arrive in some stores as early as today at prices ranging from $2,150 to $3,550, depending on the options and monitor purchased. The Infinia is designed for the consumer market, but Toshiba officials said they will introduce a corporate desktop PC next year.

The combining of various home electronics devices in a single box is what the industry calls “convergence,” a concept already embraced by other major computer manufacturers.

Gateway, for instance, recently began selling an all-in-one box of its own, and Acer’s latest PC comes with a telephone handset mounted on the side of the monitor.

The trend is likely to accelerate given the consumer electronics roots of companies such as Sony and Samsung, which controls AST Research Inc., that are now moving into the PC market.

Analysts say Toshiba--which makes a range of electronics from VCRs to copiers--has a knack for predicting what consumers want, but caution that consumers don’t seem to be clamoring for an all-in-one PC.

“How many people are really going to watch TV around a PC with a 16 or 17-inch screen?” said Kevin Hause, an analyst at International Data Corp. in Mountain View.

“It has much more of a niche appeal,” he said, especially for so-called “heat seekers,” consumers who pride themselves on having the latest technology.

Toshiba executives acknowledge the Infinia probably won’t displace living room televisions. Instead, they say the Infinia is meant for second-time PC buyers, consumers who want more from the computers in their home office, or need to cram a lot of electronics into a small space, such as a college dorm room.

But experts point out that convergence also carries risks.

“My only concern is if anything ever happens to the computer, can I still run my TV and all this other stuff,” said Adam Meyerson, executive technical director at PC Computing magazine in San Francisco.

Toshiba officials acknowledge the answer is no.

The Infinia, which is being built by an outside company under contract with Toshiba, comes in three configurations, and with two monitor choices.

A bare-bones version has a slower processor, a smaller hard drive and does not include the LCD display or the television/radio capability.

Toshiba employs about 2,000 people in Irvine and has hired several hundred more in recent months related to the Infinia launch, Scott said.

And an advertising blitz is scheduled to be launched today, with spots on network television news shows.

The desktop market is generally considered tougher than the notebook market.

Even though sales have increased at double-digit rates in recent years, profit margins have been narrowed by price wars. And the market is being crowded by upstarts such as Sony and Hewlett-Packard at a time when once-proud companies such as Apple Computer and AST in Irvine are struggling to survive.

But Scott, who predicts Toshiba will sell 250,000 of the new machines before the end of the year, said the company is braced for the challenge.

“We’ve got the power of a $53-billion company behind us,” Scott said, “and we’re approaching this from a consumer electronics heritage. We understand computers. We’re going to do well.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Toshiba America Information Systems

Headquarters: Irvine

Parent company: Toshiba America Inc.

President: S. Yatsunami

Business: Designs and manufactures portable computers, fax machines, copiers and other information-oriented products

Divisions: Nine, including Computer Systems, which developed Infinia

Employees: 2,000

Annual sales: $4 billion

INFINIA AT A GLANCE

Toshiba’s new Infinia is available in three models. All options are included on the advanced model.

Pentium desktop computer