Two Korean companies are banding together to offer low-cost PCs that could undercut the market for network computers.
Sensing an untapped opportunity, Korean high-tech giants, KDS and Trigem - both with Seoul headquarters and US offices - are creating a joint venture, Emachines, to sell desktop systems for less than $US500 to the commercial and retail markets later this year.
Emachines is already lining up a number of national system integrators to sell and service the systems, said Stephen Dukker, Emachines president and CEO.
Although the first units to ship will be for the retail market, Dukker said he believes there will also be strong commercial demand for low-cost desktops.
Boxes could also be an alternative to low-cost network computers designed as Internet clients.
"We think these boxes are NetPC and network computer killers," Dukker said.
For at least one IS manager, Dukker's intuition seems to be right on the mark.
"We are buying clones right now. If they have Intel processors we don't care whose name is on the box," said Gary Kammerling, IS manager at Kelly-Moore Paint, in California. "We buy servers from Compaq where it can't fail. But as far as desktops go, we buy from no-names as long as they are network-ready."
The Emachines systems will use an Intel Celeron 300MHz processor, and include a 10/100Base-T network card as well as National Semiconductor asset management silicon for Desktop Management Interface 2.0.
The systems will cost $499 without a monitor.
A similar version with a Cyrix M2 processor and a performance rating equivalent to 266MHz will sell for $399 without a monitor. Emachines will supply 14in monitors for an additional $100 price tag.
The units will ship in November and include the faster 300A Celeron technology with cache, as those chips come on line, Dukker said.
The trend toward building fairly low-cost no-name systems for commercial customers is not new and is often called the "white box" phenomenon.
The twist here is that Emachines systems cost approximately 33 per cent less than the next lowest priced box.
Monorail Computer is another white box manufacturer that sells systems for as little as $699. But according to Andrew Watson, Monorail vice president of marketing, the company's customers are not looking for the lowest prices.
"We have always seen our low-end products sell well but not as well as our mid-price-point products," Watson said.