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Emachines readies sub-$500 PCs
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September 29, 1998 by Ephraim Schwartz |
From...
|
(IDG)
-- Two Korean companies are banding together to offer extremely low-cost
PCs in the U.S.
KDS and Trigem are creating a joint venture, Emachines, to sell desktop systems for less than $500 to the commercial and retail markets later this year.
Emachines already is lining up a number of national system integrators to sell and service the systems, said Stephen Dukker, Emachines president and CEO.
Although the first units to ship will be for the retail market, Dukker said he believes there will also be strong commercial demand for low-cost desktops. Boxes also could be an alternative to low-cost network computers designed as Internet clients.
"We think these boxes are NetPC and network computer killers," Dukker said.
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For at least one information systems manager, Dukker's intuition seems to be right on the mark.
"We are buying clones right now. If they have Intel processors we don't care whose name is on the box," said Gary Kammerling, IS manager at Kelly-Moore Paint, in San Carlos, Calif. "We buy servers from Compaq where it can't fail. But as far as desktops, we buy from no-names as long as they are network-ready."
The Emachines systems will use an Intel Celeron 300-MHz processor, and include a 10/100Base-T network card as well as National Semiconductor asset management silicon for Desktop Management Interface 2.0. The systems will cost $499 without a monitor.
A similar version with a Cyrix M2 processor will sell for a price of $399 without a monitor. Emachines will supply 14-inch monitors for an additional $100 price tag. The units will ship in November.
Building "White Boxes"
The trend toward building fairly low-cost no-name systems for commercial customers is not new and is often called the "white box" phenomenon.
Monorail Computer is another white box manufacturer that sells systems for as little as $699. But according to Andrew Watson, vice president at marketing Monorail, the company's customers are not looking for the lowest prices. "We have always seen our low-end products sell well but not as well as our midprice-point products," Watson said.
Nevertheless, desktop prices will continue to fall through 1999, according to International Data Corp. (IDC), in Framingham, Mass. The combination of lower component prices, chip integration, and manufacturing efficiencies such as build to order and increased inventory turns means that system makers can squeeze an additional 25 percent out of the price of a desktop, said Kevin Hause, IDC analyst.
Larger companies focused on data entry may find a place for systems from companies like Emachines and Monorail, Hause said. "However, the problem white box manufacturers have in winning over the enterprise is in supplying solutions across product lines, which these companies cannot easily do," he added.