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Compaq Offers iPaq Internet Access Device to Consumers

August 17, 2000|From Bloomberg News

Compaq Computer Corp. unveiled a line of its corporate iPaq machines for consumers who want devices for connecting to the Internet at home.

The new products include a home version of the iPaq that provides Internet access, a wireless-networking device designed to link several appliances to one Internet connection, a mobile audio player and a portable device for receiving electronic mail.

Compaq, the world's leading maker of personal computers, is betting that the commercial demand for the iPaq will carry over to the consumer market and complement its PC business. Compaq executives said the iPaqs are designed to work just like kitchen appliances.

"This is not a PC, nor is it meant to be," said Mike Larson, Compaq senior vice president. "Just like a blender does its job well, so does this little baby."

Houston-based Compaq unveiled the commercial version of the iPaq last year and a handheld model earlier this year. Demand for the handhelds has outstripped the company's production capacity.

Other companies have abandoned machines aimed at home users who want only e-mail and Internet access. Last month, Dell Computer Corp. scrapped its Webpc less than eight months after it was introduced because of weak consumer demand.

Demand for the iPaq Pocket PC has been about four times what Compaq expected, said Senior Vice President Michael Winkler.

"We have massively increased the production capacity on that," he said.

The company expects production to catch up with demand in the fourth quarter. Compaq expects to sell about a million of the devices this year, Winkler said.

Most of the iPaqs will be manufactured by third parties, he said.

Compaq's iPaq Internet appliance for the home will come with Microsoft Corp.'s MSN software already loaded for Web access, and the software will update automatically over the Internet when necessary, Larson said.

The device will cost almost $600, though Microsoft is offering a $400 rebate for customers who sign up for three years of MSN Internet access at $21.95 a month. Users who sign up for one or two years will get $100 and $200 rebates.

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