Amid diminishing sales of its Aptiva brand, and increased competition across the board, Big Blue was gearing up to launch a new line of machines as part of a larger corporate networking initiative intended to bolster sales.
Unfortunately, the sales spark is now on hold, and recent sales figures show IBM is more black and blue than Big Blue.The savior-line-to-be is called NetVista, a family of stylish, matte-black computers featuring high-resolution, flat-panel screens and high bandwidth connectivity. In a release, IBM touted the line as "the company's most dramatic and significant rollout of desktop technology since its first PC almost 20 years ago."
Not so fast. The launch of the NetVista line, which was supposed to happen Wednesday, has been postponed until "early May," according to company officials, who gave no specific reason for the delay.
Now, a delayed launch is by no means a disaster in the tech world. Just ask Microsoft, which has been notoriously late, and notoriously successful, with almost all of its products.
IBM sales figures, on the other hand, have been disappointing.
Adding insult to injury, first-quarter PC sales figures released by the tech industry research firm International Data Corp. show IBM has been surpassed by Hewlett-Packard in worldwide sales, slipping to the No. 4 position overall, trailing No. 1 Compaq and runner-up Dell Computers.
Nationally, the picture is even worse. IBM fell out of the top five in the same IDC poll, dropping to No. 7 in U.S. PC sales for the first quarter of 2000.
"They would have to either mount a direct strategy or do something very quickly to rebound on consumer numbers," said Gabrielle Griffith, an IDC analyst who tracks the PC world. "We just don't see that happening."
The PC market has been tricky territory for most every retailer of late, primarily because of softening demand surrounding Y2K. Corporate markets, where Big Blue butters its bread, were particularly reticent to spend big money on new machines.
Luckily, overseas markets, many of which are just now recovering from the Asian flu that hit the Far East financial markets three years back, were hungry for machines. "The global consumer appetite for PCs helped offset a Y2K-induced slowdown in commercial market interest in PCs," said IDC analyst Bruce Stephen.
"Looking ahead, IDC believes that commercial market demand has started to stabilize in most major regions of the world, and purchase patterns should return to more normal rates during the second half of the year."
That could be good news for IBM, which is slowly but surely abandoning the consumer market for computers, focusing instead on the workplace. According to Griffith, the company pulled most of its Aptiva line from consumer retail outlets in late 1999.
"They couldn't compete, or find a sweet spot to make a profit and compete on price," said Griffith. "They weren't making money with their Aptiva line, and they had too much competition. HP, Compaq and eMachines are dominating the retail consumer market."
Now, IBM will have to capitalize on the corporate customer. And the NetVista is a fine machine to do so.
A recent demonstration of the line revealed IBM has shaken free from its stodgy, beige-box roots, replaced by sleek, black styling and top-of-the-line technology.
The line includes a range of network-happy products, including thin clients, Internet access devices and all-in-one desktop computers.
While none of the internal components are stupendous, the industrial design is worth a second look.
The all-in-one X40 is probably the coolest of the bunch, integrating a 15-inch flat panel screen, built-in speakers, a CD/DVDROM and floppy drive and the rest of the usual guts into a sweet little 16-by-16-by-10 inch package. A unique neck design allows the keyboard to fit under the monitor to free up space.
You can get the X40 with either an Intel Pentium III 667 MHz or Intel Celeron 566 MHz chip. As for peripherals, the all-in-one comes with two expandable PCI slots and seven USB ports.
Although the company will not release official NetVista price points until the line's official launch, company sources say the X40 should go for between $1,800 and $2,400.
IBM plans to invest more than $100 million in marketing and advertising campaigns to support the NetVista line, although it says the new line will not replace its existing Aptiva, PC 300 and IntelliStation products.
In fact, IBM recently introduced the fastest Aptiva computer ever built, sporting a 1 GHz Intel processor.