International Business Machines Corp. has announced a lower-priced model of its popular minicomputers, a product line that has been one of the computer giant's few bright spots this year.
The new version of IBM's Application System-400 computers costs $12,000, about $4,000 less than the previous lowest-price model.
The computer is aimed at small businesses or departments within large businesses. Up to 14 computer terminals can be connected to the machine, although IBM said more typically it would use up to six terminals.
Minicomputers fall in size between personal computers and the giant mainframes in which IBM dominates.
IBM's sales of personal computers and mainframes have been sluggish and their profit margins pinched by price cutting in the industry. That has damaged IBM's financial results: IBM's operating profit fell 74 percent in the first half of the year, while revenue slipped almost 8 percent.
In contrast, sales of the 3-year-old AS-400 minicomputer line have been strong, with double-digit growth over last year, IBM says.
In an interview, Robert J. LaBant, the IBM vice president in charge of the minicomputers, said the machines are popular partly because they appeal to a broad range of customers, from small businesses that buy one machine to major corporations that have installed hundreds.
In addition, the 12 models in the AS-400 line range in power from the new entry-level model to a dual-processor version costing more than $1 million that can be hooked up to hundreds of terminals.
Industry analyst David Card of International Data Corp. said the lower-priced machine should let IBM to go after smaller businesses than it has in the past with the AS-400 line.
The new low-end computer, a desk-side unit the size of a large waste basket, carries an unusual 90-day satisfaction guarantee. IBM says the system can be returned for a full refund for any reason.
Laptop price cut. American Telephone & Telegraph Co. has reduced the price of its Safari laptop computer by 12 percent.
The new suggested list price of the base model is $4,749, down from $5,399. The model with an 80-megabyte hard disk drive, which will be available next month, will list at $5,749, also down 12 percent, AT&T said last week.
The action follows price cuts by other personal and portable computer makers in recent months in response to a sluggish market.
"We just want to keep the Safari competitive," said AT&T spokesman Don Ferenci.
He said sales of the laptop, which AT&T introduced in April, are exceeding internal projections. The computers are made for AT&T at a U.S. plant owned by Japan's Matsushita Electric Industrial Co. Ltd.