New Large Computer is Introduced by I.B.M.

By Andrew Pollack
The New York Times

October 22, 1981

The International Business Machines Corporation yesterday introduced its most powerful computer, a machine that will be up to 40 percent faster than its current top model.

The new computer, along with pricing changes announced yesterday, was viewed by analysts as an attempt to shore up lagging earnings and to make I.B.M. more competitive against the Amdahl Corporation and other companies that make computers that are essentially interchangeable with those made by I.B.M.

The new machine, the 3081 model group K, is the second version of the 3081 introduced last November. While able to process information at a speed 40 percent faster than the first model, the new one will cost only 16 percent more: $4.3 million compared with $3.7 million.

'Strengthens Competitiveness'

''It strengthens I.B.M.'s competitiveness at the high end,'' said Thomas J. Crotty, an analyst with the Gartner Group. Analysts also noted that the new 3081, along with pricing changes for other large computers, would encourage customers to buy the machines rather than rent them, which could result in better shortterm earnings for I.B.M. The company's income has suffered recently from unfavorable currency translations and other factors.

Analysts debated, however, what effect the announcement would have on the manufacturers of large computers that run programs developed by I.B.M. but that try to best the I.B.M. machines in speed or price.

The principal makers of such compatible computers are Amdahl and National Advanced Systems, a subsidiary of the National Semiconductor Corporation, which sells computers made by Japan's Hitachi.

Together, Amdahl and N.A.S. accounted for 3.3 percent of 1980 shipments of large computers, compared with 62.4 percent for I.B.M. and 30 percent for other mainframe companies such as Honeywell and Burroughs, according to the International Data Corporation, a market research concern.

The other mainframe vendors, whose systems are not compatible with I.B.M., are not greatly affected by a new I.B.M. product.

Used as Central Systems

What the industry calls ''large computers'' are those generally used as central systems by companies, banks and government agencies to handle payrolls, inventories and large volumes of data. They cost from several hundred thousand dollars up into the millions.

''The announcement should make it a little more difficult for Amdahl,'' said William D. Easterbrook, of Kidder, Peabody. But Sanford J. Garrett, of Paine Webber Mitchell Hutchins, said the effect would not be great. ''Amdahl will have to cut its price,'' he said. ''But it's not as big a negative factor as it could have been.''

The stock market seemed to agree with Mr. Garrett. Amdahl's stock rose $1.125 yesterday, to $29.75, on the American Exchange, while I.B.M.'s fell 25 cents, to $51.375, on the Big Board. Amdahl would not comment on the I.B.M. announcement, but analysts expect the company to respond soon, perhaps as early as today, when it has a scheduled meeting with analysts in California.

First Model Surpassed

When the 3081, also known as I.B.M.'s Series H, was introduced last November, the industry breathed a sigh of relief because the system did not appear to be as powerful as competitors had feared. Amdahl and N.A.S. announced computers that would surpass the I.B.M. product in speed while using programs compatible with I.B.M., an aid to customers wishing to change vendors.

I.B.M.'s new model, which analysts estimate will be able to execute 14 million instructions a second, will be about the fastest general-purpose computer on the market when shipments start in the second quarter of 1982. But Amdahl, as well as some Japanese companies, have announced computers for later delivery that will exceed that speed.

But some analysts suggested that I.B.M. is only now beginning to disclose the capability of the 3081.

Large Increase in Memory

I.B.M. also announced new architectural features of the 3081 that will allow it to handle 2 billion characters of internal memory, compared with 32 million currently.

In addition to providing new options for customers that were constrained by the previous memory limit, the new architecture would make it somewhat more difficult for I.B.M.'s competitors to stay compatible with the I.B.M. machine, said Gerard Halloren, an analyst with the Yankee Group.

I.B.M. also said it was cutting the prices on most models in its 3033 line by 10 percent. The 3033 was the top of I.B.M.'s line before the 3081 was introduced. For the smallest 3033, however, I.B.M. introduced two improved versions.

Some analysts speculated that I.B.M. wanted to encourage customers now renting or leasing 3033 computers to buy them, in preparation for I.B.M.'s phasing them out. But an I.B.M. spokesman disputed that, saying the company was continuing to improve the 3033 line.

The company also announced new printing options, and two new devices that would enhance a computer's ability to transfer data between the central processor and peripheral storage devices. It also announced a system whereby a big central computer can operate other smaller computers over a communications line, without a human operator being present at the smaller computers.