TECHNOLOGY/IBM'S NEW COMPUTER NERVOUSLY AWAITED
International Business Machines Corp
<IBM> is widely expected to deeply affect the personal computer
industry this week when it announces a long awaited new
generation of desktop machines.
     The four new computers, expected to be called the Personal
System 2 family, are almost sure to veer away from industrywide
standards for personal computers that were first established by
IBM six years ago.
     The result id the new computers will be harder to copy and
less likely to work with software and attachments designed for
existing standards. Some market researchers are already
predicting slower growth as customers adjust to the change.
    A proprietary IBM pc will cause the pc market's growth to
be flat or even negative in 1988 as vendors and users delay
purchases to gauge the importance of the new machine,'' said
John McCarthy, consultant with Forrester Research Inc.
     IBM is traditionally very close-mouthed about unannounced
products, but so intense is the interest in these machines that
some details have leaked out and consultants, dealers and the
trade press are rife with information, both factual or
supposed.
    The four computers expected to be announced April 2 will
reportedly include one low end, low cost computer, two models
that will resemble IBM's current high-end AT, and, most
importantly, a computer incorporating Intel Corp's <INTC> 80386
microprocessor, the powerhouse chip that is revolutionizing the
personal computer.
    The microprocessor is the brains of a computer and Intel
microprocessors are the ones used in all IBM and IBM-compatible
personal computers, by far the largest segment of the desktop
market.
     The 80386, more commonly called the 386, processes
computer instructions twice as fast as the chips used in
existing IBM computers and 386-based desktop computers are as
powerful as the much larger minicomputers of a few years ago.
     Although IBM will not be the first company to introduce a
386 personal computer - Compaq Corp <CPQ> was - most industry
consultants believe that customers will not rush to embrace the
new generation until they see what the world's largest computer
company is going to do.
    What IBM will apparently do is introduce a computer that
is, at least temporarily, copy-proof. That is a far different
situation than exists with IBM's current family of personal
computers, which are cloned widely.
     With the Personal System, IBM will reportedly build as
many features as possible directly into the computers'
motherboards, including graphics capabilities, a non-standard
bus for add-on equipment and a new version of the operating
system used on all IBM compatible computers.
     The word in (Silicon) Valley is that it will take two mln
dlrs and 18 months before the machines can be copied,'' said
Michael Murphy, publisher of the newsletter California
Technology Stock Letter.
      At the same time as Personal System is unveiled,
Microsoft Corp <MSFT> is expected to unveil a new version of
its MS/DOS operating system, DOS 3.3, that will correct many of
the programming problems encountered on earlier versions of the
software. MS/DOS is used with all IBM personal computers.
      Consultants said that most existing IBM-compatible
software will run on the new computers but software written
specifically for the Personal System will not run on older
models.
     The industry will be looking closely at the delivery dates
for the new computers, particularly the 386, because if IBM
does not start shipping its entry in this important new market
soon, Compaq will continue to gain larger and larger market
share.
    Market researcher Future Computing Inc estimated that
Compaq's Deskpro 386, which started shipping last October, is
generating sales of between 3.5 mln and and four mln dlrs a
month. In the first six months of availability between 21 and
24 mln dlrs worth of Deskpro 386s were sold.
    Said Future Computing analyst Joe Cross, "That's some
indication of the kind of money IBM is leaving on the table."
 Reuter
