Dell, Compaq phasing out unconventional PC models

Wednesday, July 12th 2000, 12:00 am
By: News On 6

Rival manufacturers Dell Computer Corp. and Compaq Computer Corp. have both tripped up recently with edgy new products in the hard-to-predict PC marketplace.

Dell strayed from its tried-and-true, custom-built PC model eight months ago when it unveiled, with fanfare, the WebPC, a bare-bones, unconventional-looking machine aimed at the price-conscious mass market.

Now the Round Rock, Texas, company acknowledges it pulled the product from its Web site late last month. Remaining stock will be sold at another company Web store, Dell Factory Outlet.

Compaq, of Houston, introduced the Presario 3500 about eight months ago after chief executive Michael Capellas challenged his designers to make a "cool" looking PC. On Tuesday the company acknowledged a report saying it would stop selling the computer in the United States, but it declined to discuss why.

Dell's WebPC was a stripped-down but stylish computer, with Dell Internet service, that sold for under $1,000. SCI Systems Inc. built the WebPCs for Dell.

Bob Kaufman, Dell spokesman, declined to say how much in sales the WebPC generated or why the company is phasing out the product except to say "it was a learning experience for us."

"It would be fair to say there will be WebPC things in other products," he said, such as the WebPC's unique "e-support" button for instant online help.

Both products were seen as something of a reaction to Apple's iMac, which fans say wins the contest for coolness hands down.

Analysts say neither the Dell nor the Compaq computer delivered enough value for the money, managing to confuse consumers along the way.

"Dell had positioned it as a Web PC, but it's hard to know what it was," said Stephen Baker with PC Data in Reston, Va.

"It was not an appliance, it was a PC. But there's lots of low-cost PCs. Anybody can call a low-cost PC a Web PC. When you position something like that, it's limiting because people think it might not be a real PC," he said.

Mr. Baker said Compaq's $2,000 PC, which had a liquid crystal display monitor, was too pricey. "When you do things like that [the LCD screen] it looks cool, but it pushes the price up, which limits the market," he said.

He said Dell's problem was more one of product positioning, whereas Compaq's was about pricing.

"Apple has shown there's room for design, but people still look first at the price-value relationship," he said.

Mike Larson, general manager of Compaq's consumer division, acknowledged the company had pulled the Presario 3500, except in Japan, "where it is a strong seller."