In a direct challenge to Japanese companies that dominate the fastest-growing segment of the computer market, Hewlett-Packard Co. said last week that it would start selling a personal computer about the size of a calculator.
The market for computers that can be carried in a briefcase or pocket, yet offer power and speed rivaling desktop systems, has already been ceded by some analysts and industry executives to Asian manufacturers.
Ever smaller computers, ranging downward in size from laptop, to notebook to palm-sized, are becoming increasingly important because their sales are growing much faster than those of desktop computers.
In his announcement last week of a palm-sized portable, the 95LX, Hewlett-Packard's president, John A. Young, said his company now stood a good chance of breaking the Japanese stranglehold. "I believe that we can compete effectively with the best foreign manufacturers," he said. "We're not willing to give up on this market."
Mr. Young said the 95LX is an IBM-compatible computer integrated on two chips and comes with Lotus' 1-2-3, the popular accounting spreadsheet program, built in.
The computer, which weighs just 11 ounces and is 6.3 inches by 3.4 inches by 1 inch, will initially be built in the company's Corvallis, Ore., factory and later also in Singapore.
It will retail for $699 and be in stores sometime during the second quarter.
The machine also comes with a financial calculator, a phone and address software program and a rudimentary text editor built in. It is powered by two AA batteries that can last for up to two months. The 95LX's biggest drawback is that its keys are so tiny that information cannot be typed rapidly into the computer. It has a small screen, which can display only 16 lines by 40 characters, compared with the 25-by-80 displays of standard personal computers.
The 95LX uses memory chips embedded in cards and has more limited storage capacity than traditional systems that use rotating magnetic disks.
Two other U.S. computer-makers, Poqet Inc. and Atari Corp., have previously attempted to market palm-sized computers.
Jim P. Manzi, Lotus Development Corp.'s president, said that he was not certain how big the market for such products would be but that the new Hewlett-Packard portable offered a great deal more in performance than popular pocket-size electronic organizers by Sharp, Casio and others.
"You really want to be able to take 1-2-3 off the desktop," Mr. Manzi said. He added that the new memory card technology used in the computer permitted large spreadsheets and would increasingly be viewed as a superior data-storage alternative to disks because of its added reliability.
It includes an infrared link for transferring data and will later be able to connect with a Motorola pager radio system to receive data and messages.
The new portable was conceived by software designers at Lotus, Mr. Manzi said, adding that Lotus first approached Hewlett-Packard 15 months ago and that the companies worked together on the design.
The 95LX may also have an unintended side effect in the classroom, several computer industry analysts suggested. Noting that the machine could easily be modified to extend the range of its infrared link, they said students could secretly transfer data from desk to desk while taking a test.
Such a capability might even force educators to rethink their growing acceptance of pocket calculators in schools.