Ellison Back At The Plate With $199 Net Appliance

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It was déjà vu all over again yesterday as Oracle founder Larry Ellison announced he is once again backing a computer tasked with bringing a stripped-down PC to the consumer and education markets this year.

The new venture is being handled through the Ellison-owned The New Internet Computer Co., which announced on May 8 it has developed and started shipping into the education channel a $199 Internet appliance called the New Internet Computer. The company has plans to enter the consumer market sometime this year, a company spokesman said.

Ellison was behind Oracle's development of the ill-fated Network Computer (NC) five years ago. The NC was a dumb terminal that worked off a central server and was geared toward the business market, but found few takers.

The New Internet Computer (NIC) is not as powerful or as inexpensive as many full-fledged PCs now on the market. The NIC will find itself competing with several other Internet appliances now on the market along with PCs from eMachines, Compaq and Hewlett-Packard. While the PCs are more expensive, starting at $399, they include a monitor and consumers can utilize $400 ISP rebates that effectively drop the PC's price down to zero.

The Linux-based NIC uses a Cyrix 266MHz processor, has 64MB of RAM, USB ports, a 24x CD-ROM and a 56K modem. The device is not equipped with a hard drive, is not bundled with monitor or printer and the end user must sign up for an Internet Service Provider. It is strictly for surfing the Internet and email.

Ellison said the beauty of the NIC is that is uncomplicated and simple to use.

One analyst called Ellison's decision iffy and questioned the company's business model. Stephen Baker, director of hardware analysis for PC Data, Reston, Va., said, "there certainly will be some kind of demand for an Internet appliance, but the trick is to turn it into something profitable."

Baker added that the education market might not accept the devices with open arms because schools tend to want computers that can handle a multitude of tasks and not just search the Internet.

A NIC spokesman said the company has received orders for the appliance and has had inquiries from interested retailers. He declined to discuss further the company's retail plans.

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