By Ed Scannell
InfoWorld
Posted at 1:50 p.m. PT, Nov. 3
Believing it has better entrenched itself in the high-end portable and
desktop markets, IBM will redouble its efforts to capture a greater
market share at the low end during the next six months, according to
Robert Stephenson, the new head of IBM's PC Co.
The company's first move will be the long-awaited low-end line of
ThinkPads that debut the week of Nov. 6.
Those systems will range in price from roughly $2,000 to $3,500, far
less than the $3,500-to-$7,500 prices of the portables that IBM has
successfully rolled out in the past few months.
"We are not doing as well as we could be in the value space with our
portables. In fact, we need to do much better in the value space in
general,'' Stephenson said. "Too many of our key products are now in
the higher end categories."
In addition to introducing the low-cost ThinkPad 360 series, the
company will be aggressive in the low end of the desktop market,
Stephenson said.
Stephenson expects the company's current low-end business system, the
75-MHz Pentium now priced at $1,366, to drop to about $1,000 early
next year. IBM may also cut the price of its most recently announced
Aptivas, he added.
"Our Aptivas are marvelous boxes, but we have to figure out how to
bring [prices] way down," Stephenson said.
Central to any hopes IBM has of expanding its market share at the low
end is improving its execution and image as a reliable hardware
supplier, Stephenson admitted.
IBM's lack of reliability is "at the core of most of our market and
user problems," Stephenson said.
Besides switching from a build-to-order to a build-to-demand business
model, the company is in the process of recategorizing all of its
systems as A, B, C, or D systems.
For example, a 100-MHz Pentium-based desktop that creates heavy
short-term demand would be in the A category, with IBM gearing up its
manufacturing plants to fill orders in just a few days.
In contrast, orders for customized server products designed to meet
more specific user application needs might be placed in category B,
where IBM would plan on meeting delivery in 10 days.
This changeover is expected to fundamentally alter the way IBM's
technical and marketing organizations work together in terms of
designing, delivering, and marketing systems right down to the
grassroots level.
"Even the brand managers will have to think in terms of A, B, or C
categories during a system's various states of design and
development," Stephenson said.
Despite its focus on the lower end of the market, IBM will continue to
forge ahead at the higher end. Early next year, the company is
expected to refresh its higher end PC 700 series for the desktop with
features and functions squarely aimed at corporate users.
"We will add more functions to those boxes that differentiate them
[from the PC 300 Series]," Stephenson said, "such as better built-in
networking, superior speech, and multimedia capabilities with price
points that start at around $2,500."
Another area Stephenson hopes to explore is working more closely with
Intel Corp. But that wouldn't necessarily mean buying Intel-designed
or -built systems, he added. Instead, the emphasis would be on jointly
designing solutions with the chip manufacturer.
"The communications and multimedia markets are going to explode,"
Stephenson said. "I'd like to think we could together come up with
solutions to solve user problems instead of seeing who can shoot an
electron down the pipe faster."
This story appears in the Nov. 6 issue of InfoWorld.
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