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AST Unveils Key Computers : Revamped Models Counted On to Help Reverse Losses

October 10, 1995|GREG MILLER | TIMES STAFF WRITER

IRVINE — Struggling to halt a lengthy financial slide, AST Research Inc. on Monday introduced revamped versions of two of its key computer models as part of what company officials call a value-conscious, "early to market" strategy.

Within the past week, the Irvine-based company has begun shipping updated models of its Bravo and Premmia desktop computers, brand names that have accounted for roughly 45% of the computers AST has sold in recent years, analysts said.

The unveilings represent a concerted effort by AST to be first to market with products that have the latest technological wrinkles. AST was once known as a nimble manufacturer but in recent years has been hampered by product delays and marketing mistakes.

Company officials were quick to say Monday that they do not expect these products--which have been in development for months--to completely turn around a prolonged sales and market-share tumble. But they acknowledge that there is palpable pressure on these new PCs to succeed.

"We are looking at every product that we bring to market as a contributor to turning the company around," said Dennis Cox, 46, who last week was promoted to lead AST's consumer sales team in the United States.

The new products are aimed at expanding AST's presence in the computer market by not only competing for cost-conscious customers but also attacking the high-end business market.

In the entry-level market, the company has begun assembling its low-cost Bravo systems with a new processor that by some measures outperforms Intel's popular Pentium processor, but costs as much as $60 less per machine.

That lower manufacturing cost is critical to helping AST protect its margins in a cutthroat market where entry-level machines sell for about $1,300. AST has priced its Bravo LC (the initials stand for low cost) at $1,360.

At the other end of the spectrum, AST is upgrading its top-of-the-line Premmia machines in an effort to crack the corporate workstation market, a high-priced realm of powerful computers used for memory-hungry tasks such as crunching huge quantities of numbers or producing programs and graphics for video games.

This market has long been dominated by Sun Microsystems, Silicon Graphics Inc. and other companies that are not so familiar to everyday computer users but are trusted manufacturers of high-powered computers that can cost well over $20,000 apiece.

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AST hopes to break in at the bottom of the market by shipping computers with sophisticated memory and graphics to compete with some of these bigger machines.

AST said it would undercut its competitors by as much as 40%, with prices ranging up to $9,584.

Industry analysts gave these new products high marks but hastened to add that AST has many problems.

The company reported a loss of nearly $100 million last year, and has acknowledged that its performance in the last quarter will be significantly worse than in the same quarter a year ago, when AST posted a loss of $40 million.

"It appears that, with everything else that's broke, AST can still turn out good products," said Scott Miller, an analyst at Dataquest in San Jose. "This is not earth-shattering. But the fact is, these are signs that there are still a lot of good things happening at AST."

Miller said AST could scoop up some relatively easy money by being one of the first traditional PC manufacturers to venture into the workstation arena, a market that some analysts expect to grow by more than 200% over the next year.

But Miller and other analysts cautioned that the market for workstations remains small relative to the broader business markets for desktop PCs.

By tweaking the technology and pricing of its Bravo line, AST has advanced its presence in a much larger market, but one that is fiercely competitive. AST's entry-level machines go up against those built by rivals Dell, IBM and Compaq, which unveiled a new entry-level PC of its own last week.

AST's machines have smaller hard drives than rival computers, but AST could have an advantage by being the first company to ship PCs with new processors made by Cyrix Corp. of Texas that are clones of those manufactured by Intel. Processors are the electronic brains of computers.

These processors are, in some cases, faster than Pentium chips by Intel, but cost 15% to 20% less, AST officials said. Whether that helps AST sell computers will depend on consumers are willing to stray from the well-known Intel brand name, analysts said.

The answer to that question is "absolutely yes," said Cox, who added that AST has been selling computers with slower versions of the new Cyrix chip for more than a year.

Cox said the new Premmia and Bravo computers were not designed solely to rescue the company from its deep financial troubles, but admitted that these days AST has little room for disappointments.

"The Premmia and Bravo products are players in a big game plan," he said.

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