Report: PeoplePC to sell Ellison's Internet appliance

Targeting companies that wish to give employees a simple way to access the Internet, PeoplePC will add the New Internet Computer (NIC) Internet appliance to its portfolio later this year, according to a published report Thursday.

The device is made by the New Internet Computer Co., a San Francisco startup co-founded in January 2000 by Oracle Chairman Larry Ellison. It will cost about US$20 per month including Internet access, according to a report in The Wall Street Journal. This makes it cheaper than PeoplePC's current PC offer that starts at $24.95 per month.

In the U.S. PeoplePC caters to individuals as well as companies. In Europe, where PeoplePC has offices in the U.K. and France, the company concentrates on the business market. It cuts deals with large companies to supply computers for home use to employees as a benefit. Employees typically pay a small monthly fee to their employers for the service.

Although the Internet appliance will, according to the report, be part of the business program in the U.S., Peter Adams, general manager for PeoplePC in the U.K., said it won't be offered in Europe.

"We have been evaluating the Internet appliance in Europe. It is a low cost entry-level device to just do Web surfing. Most companies want a full-fledged PC and PC prices are going to fall so fast that the NIC will only satisfy the very low-end of the market," said Adams.

European companies aren't looking for simple Internet devices, according to Adams.

"The big driver in offering computers to employees is to get IT literacy across the company. Part of that is access to the Web, another part is knowing how to use applications such as Word and Excel, which you can't do on an Internet appliance," he said.

In Europe PeoplePC has delivered 85,000 PCs to employees of multimedia and utilities powerhouse Vivendi Universal SA, its biggest customer to date. A contract with U.K. power company Powergen PLC to deliver Internet ready PCs to its employees was signed in June. Powergen has about 5,000 employees, and PeoplePC expects about 80 percent of them to request a PC, said Adams.

The NIC, sold online for $199.99 by its maker, is powered by a VIA Cyrix MII PR266 processor, has 64MB RAM and a 4MB Flash Memory Disk, but no hard disk drive. Connectivity is provided through a 56K bps (bits per second) modem and 10/100 base T Ethernet. The user interface is based on the Netscape Web browser.

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