Compaq Expands IPaq Family

SAN FRANCISCO (08/15/2000) - Known for desktops and notebooks, Compaq Computer Corp. is breaking out of the PC shell with the introduction of consumer devices and Internet appliances bearing its IPaq brand.

Compaq is unveiling on Tuesday a host of new IPaq products that follow on the heels of the popular IPaq Pocket PC handheld released in June. The new non-PC lineup includes a Web appliance with Microsoft Corp.'s MSN service, two Compaq-branded Blackberry wireless e-mail devices from Research In Motion Ltd.

(RIM), a portable audio player, and a residential gateway. Compaq representatives describe the devices as designed to "get the most out of the Internet" and say these products represent a shift toward Internet-centric devices beyond the PC.

PDAs Take Work Home

The sleek IPaq Pocket PC personal digital assistant offers portable access to e-mail and the Web as well as contacts and schedules. Getting your hands on one is the hard part.

Since the Compaq IPaq Pocket PC began shipping, demand has been extraordinary, says Cindy Box of Compaq's I-appliance marketing group. "We're ramping up as fast as we can."

Thanks to Compaq's expansion jacket design, the IPaq Pocket PC can become a wireless device with the addition of existing CDPD PC Cards, such as the Sierra Wireless AirCard. But for more affordable wireless access to office e-mail, Compaq also announced IPaq versions of the RIM Blackberry system.

"The IPaq Blackberry wireless solution includes the server, airtime, and the devices," Box says. "Devices will come in a handheld and a wearable [pager-size] form factor."

The pager-size IPaq Blackberry W1000 is scheduled to be available by the end of August priced at US$399, while the $499 H-1100 handheld should hit shelves by mid-September, Box says. Like existing Blackberry devices, the Compaq products offer wireless access to Microsoft Exchange e-mail either using a corporate Blackberry server or directly from an individual's PC using desktop connector software that comes with the device.

Compaq will sell unlimited wireless airtime for $39.95 monthly and offer additional services such as paging and Canadian roaming. Support for Lotus Domino is slated to roll out by the end of the year, and a Web browser is also under consideration.

Compaq isn't reinventing the wheel with its Blackberry products. Under the IPaq name, Compaq will offer the same RIM devices already sold with the Blackberry service: the H-1100 handheld is the $499 RIM 957, and the W1000 wearable is the $399 RIM 950, Box says. What Compaq brings to the equation is additional services.

"We're a leader in Microsoft Exchange deployment," Box adds. Compaq will sell the Blackberry package to corporations--with the Blackberry server--and to individuals.

Making the Net Simple at Home

Compaq has the home in mind with its IPaq brand. Even the Pocket PC and Blackberry devices travel from the office to the home.

The first of the long-awaited MSN Web Companions, the $599 Compaq IPaq Home Internet Appliance is designed to offer easy access to the Web.

"It gets people engaged and involved with the Internet," says Trey Litel, marketing manager for Internet services and IPaq products. While $599 is arguably high for an Internet terminal with no hard drive, Microsoft will offer a $400 rebate to users who sign up for three years of MSN. Since the device only supports MSN as the Internet service provider, you might as well. The IPaq Home Internet Appliance is scheduled to hit shelves later this month.

Compaq also announced a personal audio player for its IPaq family.

"So far, the digital music phenomenon has been PC-based," Litel says. With the pager-size IPaq Personal Audio Player, Compaq hopes to help its PC customers get their digital music out of the PC box.

Also available by the end of August, the $249 player comes with two 32MB multimedia cards as its removable memory. Depending on the format, that combination holds about two hours of music, Litel says.

While there are several other popular codecs (compression/decompression schemes) for digital music besides MP3, many portable players only support one or two.

Compaq's player not only supports MP3 and Windows Media Audio but also Dolby's AAC (advanced audio coding), Litel says. Record companies like AAC because it has built-in rights management, he adds. So does WMA.

Compaq says its player isn't limited to these formats. "As other formats come out, the player can be upgraded over the Internet," Litel says.

While other music players such as Diamond's Rio 600 also support several formats including AAC, Compaq adds the perk of a $50 discount off its player when you buy a Presario PC. Compaq preloads the Rioport Audio Manager software in Presarios so you can plug in the player and go, Litel says.

Home Network Hub

As the final announcement in its home IPaq product tree, Compaq is unveiling a residential gateway device called the IPaq Connection Point.

Scheduled to be available in mid-October priced at $499, the Connection Point supports three types of networks at the same time: the wireless Home RF, Home PNA (phone-line networking), and Ethernet, Litel says.

Designed to act as a single modem through which an Internet connection can be shared throughout your home network, the Connection Point bundles security with a firewall product from Watchguard Technologies.

The company will also offer a 90-day trial of Watchguard's Live Security product, Litel says.

Home users without any network will also need to buy other products in order to set up a home network, Litel says. The Connection Point does offer plug-and-play set-up to make difficult tasks easier, such as configuring a firewall or managing a wireless network, he adds.

And if you already have a network, the IPaq residential gateway can free up whatever PC you've dedicated as the host.

Compaq Plays the Rename Game

With its IPaq announcements, Compaq is attempting to reinvent itself with a focus on Internet appliances and consumer electronics. Even its IPaq brand has shifted since this spring's release of the IPaq legacy-free corporate desktop.

"It's a logical shift," says Tim Scannell, an industry analyst at Mobile Insights. "Compaq senses that things are becoming very communications-centric and Web-oriented."

The IPaq is well recognized on the business side, Scannell adds. With this effort toward Internet-enabled appliances, Compaq wanted to extend that brand to the home, he says.

But Scannell criticizes Tuesday's IPaq launch as being too hardware-oriented.

If Compaq is targeting consumers, saying these are devices for grandma to share photos, it should focus more on customer services associated with the products, Scannell says. "It's dangerous not to take a solutions approach out of the gate."

As for the IPaq desktop, "it won't exist as part of the IPaq sub-brand moving forward," says Bill Sidwell, senior strategist, worldwide brand strategy group at Compaq.

With IPaq, Compaq hopes to simplify its branding structure, Sidwell adds.

Presario will remain the brand for home and small-office systems, while IPaq will be personal devices; a third, as-yet-unnamed brand, will include professional desktops, notebooks, and thin clients. The IPaq desktop will fall under that professional group, Sidwell says.

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