NetPC just a marketing ploy, IDC says

The NetPC initiative being promoted by Intel and Microsoft is shaping up to be little more than a gambit to divert attention from the network computer push, analysts at market researcher International Data (IDC) have declared. Though much fanfare accompanied the early demonstrations of NetPCs around the world last month, IDC says vendors actually expect to sell very few of the devices.

The NetPC initiative being promoted by Intel and Microsoft is shaping up to be little more than a gambit to divert attention from the network computer push, analysts at market researcher International Data (IDC) have declared.

Though much fanfare accompanied the early demonstrations of NetPCs around the world last month, IDC says vendors actually expect to sell very few of the devices.

"I don't think that anyone is going to derive a lot of volume from NetPCs," sysd Bruce Stephen, group vice president for personal systems research at IDC.

The NetPC concept - the brainchild of Intel, Microsoft and several major PC vendors - promises sealed, thin-profile PCs with which companies can equip their workforces at low cost. With their Zero Administration Windows software, the NetPCs are billed as easy to deploy and as offering a lower total cost of ownership than their full-blown PC brethren.

Despite the initial hoopla, vendors recently have admitted that they do not expect high sales of the machines. Last week, for instance, managers at both Hewlett-Packard. and Compaq - two of the original promoters of the concept - expressed their reservations about prospects for the devices.

And last month, Japanese PC vendors joined Microsoft in a flashy NetPC announcement in Tokyo, but although the country's top vendors were all present in body, some officials said behind the scenes that their spirit was lacking. None of the vendors displayed working products, none released specifications for their NetPCs and few had concrete plans as to when they would roll them out.

IDC forecasts that, worldwide, PC makers this year will ship no more than 200,000 NetPCs, a number that could shrink because of delays in some of the underlying NetPC technology.

The real achievement of the movement has been to focus the market's attention on PCs following major promotions by many computer industry players of low-cost PC alternatives such as Oracle's network computer and Sun's Java Station, the analysts say.

"The NetPC is confusing the market, which is their objective," says Sean Kaldor, director of worldwide quarterly PC market tracking at IDC. The NetPC, he says, is a bridge product.

"The NetPC buys the Wintel empire time until they can get prices down and build in lower-cost-of-ownership features into regular PCs," Kaldor says.

Because no vendors are setting up NetPC divisions, IDC says it believes that the companies will subsume the concept - a PC with a sealed case - in their PC lineups as an option for customers.

"The NetPC takes asset control and management to a physical level," Stephen says. "Vendors are creating new enclosures, but they're not creating new [PC] designs [in their NetPCs]."

IDC expects the PC community to pursue its counteroffensive against the NC threat with ever-cheaper PCs. Vendors are beginning to integrate lower-cost processors from companies like Cyrix. into their machines as a step toward lower prices, the analysts say.

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