Chip war escalates a notch at the Spring Comdex show

Toshiba America Information Systems Inc. introduced notebooks in all weight classes,
including a 2-pound notebook.


Digital, trying to work around legal battles with Intel and keep a foothold in the
desktop market, brought out PCs with K6 chips, Advanced Micro Devices Inc.'s Intel clone
processors.


Government vendors at Spring Comdex expressed cautious optimism that their 1997 sales
might exceed last year's. Standard Pentium MMX desktop sales remain an unknown factor,
although Digital is betting that MMX performance will attract government buyers.


"We're seeing a grassroots demand for MMX processors," said Phil Kennett,
general manager for Digital's federal PC group. He said the Defense Department,
particularly the Navy, has been asking for PCs with Pentium MMX processors.


Digital officials said they hope some of the demand will spread to their Venturis FX-2
models with AMD K6 processors running at 166-MHz, 200-MHz and, soon, 233-MHz clock speeds.
Prices for the K6 PCs are as much as 14 percent lower than those of comparable Digital
systems with Intel processors.


According to Digital's research, K6 processors perform about 5 percent better than
comparable Pentiums.


"We think there's a ready and waiting customer" for K6 PCs, Kennett said. The
newest Venturis PCs should be on General Services Administration schedule contracts before
the end of June, he said.


Digital's announcement of K6 PCs came days after Intel hinted it might stop supplying
processors to Digital when its existing commitment expires this fall. Digital earlier had
sued Intel, charging that Intel's Pentium Pro and other processor designs infringed upon
Digital's Alpha patents. Intel has countersued.


The suit "caught most of us by surprise," said Denny Lane, Digital's director
of business management. "We've been working on [K6] for nine months. We're not
concerned at this point that we'll be cut off. We will meet all our obligations and have
no plans for reducing" the number of PCs with Intel chips on federal contracts.


Intel spokesman Chuck Mulloy said long-term agreements with Digital cover embedded
processors, flash cards, video phones and other products, but Pentium, Pentium Pro and
Pentium II processors are covered under separate quarterly agreements that expire Sept.
30. He would not comment on potential renewals.


Digital's major PC contracts include the Navy's Tactical Advanced Computer blanket
purchasing agreement, the Veterans Affairs Department's Procurement of Computer Hardware
and Software, and the Postal Service's Acquisition of Desktop Extended Processing
Technology.


The disagreement with Intel likely won't endanger any of Digital's government
contracts, said Mark O'Donnell, vice president of business development at Sysorex
Information Systems Inc. The Fairfax, Va., company vies with Digital for orders on the VA
contract.


The reason, O'Donnell said, is that "nobody can really specify Intel Pentium"
on government requests for proposals because of a successful protest against a sole-source
award to IBM Corp. several years ago.


It's desirable to offer federal buyers PCs with Intel chips, he said, but not mandated.


O'Donnell said Intel competitors AMD of Sunnyvale, Calif., and Cyrix Corp. of
Richardson, Texas, claim that benchmark tests show their processors perform as well as or
better than similar Intel chips.


Meanwhile, analysts at Spring Comdex continued to speculate that Digital's PC business
unit is on the selling block for any bidder willing to pay a 10-figure asking price.


Toshiba also looked for buyers-for its 1.85-pound Libretto 50CT. Priced at $1,999, the
fully functional Microsoft Windows 95 notebook is far from pocket-sized at 814 by 412
inches and 113 inches thick.


The Libretto has a 75-MHz Pentium, 772M hard drive, 16M RAM, 16-bit sound and 6.1-inch
VGA active-matrix display. One slot is open for a Type II PC Card.


The fat eraser-tip pointer is just to the right of the screen to allow thumb
manipulation while two other fingers handle the mouse buttons. The Libretto is configured
only for right-handed users.


This keyboard could be a challenge for big hands and touch-typists, although it's a
vast improvement over the Chiclet-styled keys on Windows CE handhelds. Most of the 80 keys
are about 14 millimeters wide and 11 mm tall with 1 mm of space between.


A port expander that attaches to the back has VGA-out, parallel and serial connections.
An infrared port running at 115.2 kilobytes/ sec is standard on the Libretto.


There are some connectivity issues. The only external media device is a 312-inch floppy
drive. There is no CD-ROM connectivity-a drawback considering that many software packages
come on CD-ROM.


Toshiba brought out other new models for its notebook lines:


Toshiba officials said government buyers might get discounts and the company expects to
sell the notebooks on GSA schedule contracts by midsummer.


For more information, visit the company's World Wide Web site at http://www.toshiba.com/tais/csd/products/portable/ or call 703-522-3903. &127&127&127


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