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ACER'S U.S. UNIT WON'T SELL COMPUTER WITH ZIP

The U.S. unit of Taiwan-based Acer Inc. said it won't sell its parent company's planned $500 computer, because it doesn't believe the computer's operating software will appeal to an American audience, a spokeswoman said.

Acer said Wednesday that it plans to introduce next month the computer that would include Iomega Corp.'s Zip drive, making it the first one at that price with storage capacity. Iomega's shares jumped 24 percent Thursday after the announcement.The computer will run with Microsoft Corp.'s DOS operating system and Windows 3.1 software, rather than the current Windows 95 software.

"We don't feel the American audience is going to happy with a system that's going to be DOS-based and Windows 3.1-based," said Jessica Kersey, a spokesman for Acer's U.S. division.

Shares of Iomega, a disk-drive maker based in Roy, Utah, rose 105/8to 55 in trading of 17 million shares, making it the most active stock in the United States.

The Acer transaction "is still a monstrous deal," said Joe Besecker, analyst at Emerald Research in Lancaster, Pa. "It still positions them right were the marketplace is going. Where they first sell is not that important to me."

Acer's inclusion of a storage drive sets its computer apart from so-called network computers planned by International Business Machines Corp., Apple Computer Inc. and others. Those companies plan to market their computers as inexpensive links to larger networks, such as the Internet's World Wide Web.

U.S. sales amounted to $1.4 billion, or 26 percent, of Acer's $5.5 billion in worldwide sales last year.