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Portables: 'the beginning of a mainstream.' (portable computers)

Last fall, Lotus quietly put together a Portable Computing Group that took over responsibility for an apparently haphazard portfolio of products, including LotusWorks, the Hewlett-Packard LX95 palmtop (which contains an "embedded" version of 1-2-3), Lotus Write (a junior edition of Ami Professional), Agenda, and, recently, a Windows-based PIM called The Organizer that Lotus acquired from a U.K. developer. Although this collection looks like the Lotus spare parts department, it actually reflects some interesting insights about the emergence of portables and other small-scale machines as a new computing platform. We spoke with Leon Navickas, who heads Lotus's "computer appliances" development efforts, about some of the issues Lotus faces with portable platforms:

How big is the market opportunity in portables?

"One out of every three PCs sold today is a portable, and we're seeing 25% to 30% compound annual growth for the portables category, compared to at most 10% for desktop PCs. This category isn't just an interesting trend--it's the beginning of a mainstream that can't be overlooked."

But aren't the applications that run on portables largely an extension of the desktop market?

"Not entirely. For example, we've found that half of our LX95 customers use their machines primarily as a personal organizer, even if they bought it originally for number crunching. Yet when you look at sales of desktop applications at retail, PIMs rank near the bottom of the list, somewhere around tenth or twelfth place in popularity. There's a very different pattern of usage here.

"In many ways, portables represent a new design center. They don't necessarily have a hard disk, a fast processor, or a color display--all the things developers assume are standard on a PC. You also deal with applications that may be occasionally connected to a client-server environment. In particular, we're doing a lot of work trying to build software that's tuned to wireless data communications."

Your channel strategy for portables seems to downplay the retail channel in favor of OEM bundling deals and "embedded" applications. Why this approach?

"Our customers are really the people who build the computer. We're in there working with these customers when they make decisions about which chips to use. We expect to see a whole range of special purpose machines in this category--spreadsheet machines like the LX95, personal organizers, personal digital assistants, personal communicators, maybe even devices to drive your TV. Then there are all kinds of information delivery mechanisms. We also think the portable category will go upscale with machines that are more DOS-like, and that can run Windows. In the long run, we hope to be a supplier of software that a whole host of manufacturers will license."

How competitive is this market likely to be?

"When hardware OEMs go out to cut software deals they don't talk to just one developer. The negotiations involve complicated calculations of variables like product quality, brand awareness, volume, and price-- which usually boils down to about 10% of suggested retail price. But deals have been known to turn into bidding contests."

Leon Navickas, general manager, computer appliances division, Lotus Development Corp., One Rogers St., Cambridge, Mass. 02141; 617/693-7670.
COPYRIGHT 1992 Soft-letter
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Soft-Letter
Date:May 26, 1992
Words:518
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