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Compaq targets Web-dazed corporates with iPaq

Stick an 'i' on the front, tell punters its got Net access, sell buckloads. Sorted

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Compaq's iPaq may not share the iMac's colourful casing, but the principles behind are exactly the same: provide a cheap, task-specific (in this case, Internet access) PC in an attempt to save the vendor's bacon. It certainly appears to have worked for Apple, but will it work for Compaq? The key to the iPaq is not its iMac-soundalike name, nor is abolition of 'legacy' components (not least since one the iPaq's two configurations doesn't eliminate them -- clearly Compaq prefers to play it safe than really push the legacy-free point), but Compaq's focus on the corporate market. In that respect, it resembles Sun's network computers of old and its new Ray than Apple's consumer computer. Compaq CEO Mike Capellas' plan here is to sell bucket loads of the $499 computer into corporates. It sounds a smart idea: ditch all those huge, ugly beige boxes, and replace them with slimline, cheaper boxes that work the same way but look nicer and offer fewer cables to connect -- just a USB keyboard, a monitor, Ethernet hook-up and power -- and without any of those horrible CD or floppy drives for employees to install unauthorised apps. So far, so good. Sun's Ray, which contains even less parts that the iPaq, ships for the same price and is essentially a graphics terminal for apps running remotely on a server. iPaq at least has its own CPU and storage, but it's clearly a move closer to the network computer than previous Wintel PCs have come. Compaq is playing the Total Cost of Ownership game here, and will no doubt soon stress the iPaq's support for Windows 2000's centralised management features. The trouble is, the last time the TCO card was played, by Sun, it pretty much failed. As a whole, corporates didn't switch from desktop PCs to NCs or terminals, and it's hard to imagine them doing so now. What has changed since then is that the Internet is now rather more important to business than it was before. Compaq reckons that next year 15-20 per cent of corporate PC orders will request Internet-oriented machines, rising to 50-60 per cent over the next couple of years. And some potential buyers probably are dim enough to imagine that a sexy client is what corporate Net access is all about, rather than the firewalls, proxy servers and Ethernet connections the rest of us were working with. After all, what's the essential difference between an iPaq running Windows and Internet Explorer and, say, an eMachines box running Windows and Internet Explorer? Answer: nothing at all, not even the price. And the only thing revolutionary about the iPaq is its price -- and not because it's $499 but because it's Compaq offering a cheap PC, something it would never have done before. The iPaq is just a cash-in product -- cashing in the iMac-inspired notion that a pretty case guarantees sales and on business' new-found interest in e-everything. ®

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