A.T.&T. Introduces Personal Computer

By David E. Sanger
The New York Times

June 27, 1984

The American Telephone and Telegraph Corporation, making its long- expected entry into the personal computer market, said yesterday it was ready to take on the International Business Machines Corporation in what appears to be the first head-to- head contest between the two giants.

''We welcome the electronic 'High Noon,' '' said Charles Marshall, chairman of AT&T Information Systems, the telephone company's 18- month-old computer division.

Contending that his organization would compete best on its own turf - telecommunications - he also showed a high-speed network that can link the new machine to more powerful office computers in an office building or on a campus.

Separately, another maker of I.B.M.-compatible computers, the Compaq Computer Corporation, said yesterday that it would introduce its first desktop machine on Thursday.

The Compaq model, like A.T.&T.'s new product, is based on a faster microprocessor that should make it substantially more powerful than I.B.M. models. It also includes an unusual combination of high-capacity mass storage devices, which analysts said could make Compaq a potent competitor in the office computer market.

A.T.&T.'s announcement came after weeks of conjecture both about its new machine and about its ability to succeed in a heretofore alien market. Officials of the telephone company declared yesterday that retailers, worried about I.B.M.'s domination of the market, would welcome an alternative to avoid become overdependent on the computer giant.

''They are looking for someone with staying power,'' said Robert J. Casale, president of marketing and sales for AT&T Information Systems, ''and we are clearly in this to stay.'' The new machine, he said, would be carried by Computerland, Sears Business System Centers, Microage, Compushop and other retailers - but not, at least initially, by A.T.&T.'s own Phone Center stores.

''In this world, with the exception of Apple, everyone else is selling variations of the same thing,'' said Jon Shirley, president of the Microsoft Corporation, the Bellevue, Wash., concern that developed the operating system for the I.B.M. PC. ''At this point, it is more of a marketing question than a question of technical differences between I.B.M. and A.T.&T., and a lot of retailers feel that A.T.&T. has the muscle and the ability to move the product.''

In fact, there are relatively few differences between A.T&T.'s new entry, called the Model 6300, and I.B.M.'s machine. The Model 6300 is priced from $2,745 to $4,920, or 5 percent less than I.B.M.'s prices for models of similar configuration.

More significantly, the Model 6300 is completely compatible with the I.B.M. machine. Some analysts contend that compatibility, while necessary for a late entry in the computer market, will force the telephone company to follow I.B.M.'s every step, particularly price cuts that analysts say A.T.&T. could ill afford.

But Mr. Marshall defended the decision yesterday. ''We had to recognize that in the marketplace today there are thousands of MS-DOS machines,'' he said, referring to the I.B.M. operating system. ''Thousands of programs have been run under that system, and our customers have a big investment in that software. For us to ignore that fact and go off on our own would not make sense.''

The A.T.&T. machine is made by Ing. C. Olivetti & Company, the Italian office equipment manufacturer that is 25 percent owned by A.T.&T. Olivetti is also marketing the machine under its own label in Europe.

Although A.T.&T. officials would not comment on production plans, analysts estimated that 60,000 units would be made this year.

A.T.&T. officials also said they expect to introduce one and perhaps two new desktop computers by the end of this year. They are being jointly developed with Convergent Technologies, a California computer maker, and are believed to be based on Unix, an operating system developed 15 years ago by Bell Laboratories. A.T.&T.'s more powerful machines already operate on Unix.

Industry experts said they were most impressed by A.T.&T.'s new local area network, similar to one that I.B.M. said last month would not be available for two to three years. The network makes it possible for users to share peripheral equipment, such as printers, or draw data from much larger mainframe computers.

''It's a good start,'' said Daniel J. Rosenbaum, senior analyst for the Yankee Group, a Boston consulting firm. ''When you combine the computer with the network, you get more than I.B.M. can offer today.''

Compaq's new machine, called the Deskpro, will also be priced close to I.B.M.'s product line. But Compaq, which won a reputation by marketing an enormously successful portable version of the I.B.M. Personal Computer, said it would include an unusual feature: four open slots in which users can place any combination of mass storage devices.

In the most advanced model, selling for $7,195, the slots would be filled with two standard floppy-disk drives, a hard drive and a tape-backup system that prevents the loss of data on the hard drive. Such systems are now sold only as peripheral equipment, although demand for them has increased as businesses seek to prevent the accidental loss of data.

''There is this uninformed feeling in the industry that you can't conform with the I.B.M. standard and differentiate your product at the same time,'' said Benjamin Rosen, Compaq's chairman. ''I think we are showing that this is not the case.''