"PC ANNOUNCEMENTS" by MIKE TODD, Aug. 8, 1986 at 1:39 about NEW PRODUCTS AND SERVICES FOR PC USERS (45 notes) 45 (of 45) MIKE TODD Mar. 21, 1987 at 16:53 The following SourceMail message was received from Marty Winston who is the member of the SIG who has been arranging for the PrevieWare versions of software for us to try. You'll find this a most interesting revelation about the expected announcements from IBM on the 2nd of April. Don't miss this one!!! Mike - - - - - - - - - - - - - - - - - - - - - - - From: BDS401 On:21 MAR 1987 At: 13:32 Subject: IBM REPORT FROM: Winston & Winston March 21, 1987 IBM Briefing This document includes a briefing on what we've learned so far about the IBM annoucements expected April 2, 1987, and how we interpret their impact upon the marketplace. In addition to four new PC heirs (Personal System 2 models 30, 40, 50 and 60), IBM will be updating Token Ring (to 16 Mbps, four times the current speed, and with PC-NET/NETBIOS compatibility), introducing a new DOS (CP/DOS 1.0), launching some new ProPrinter and mainframe products and maybe more. A clever "clone killer" combination of gate arrays and ROM code interact to make copycats easy to catch and prosecute, functions of the design difficult to duplicate. A new graphics standard involves new higher-res color monitors and a new connector. There's a new bus standard, new memory expansion based on new 1MB RAM chips, and maybe a going-away party for the existing PC and PC/AT lines. Throughout, IBM will be evidencing superb strategic and tactical product planning. Hardware features will make cloning techno- logically difficult, requiring two to three years. Performance characteristics are dramatically advanced, and will make it all but impossible for current technologies compete at anything near IBM's price. Pricing is coming down dramatically, making it difficult to come in at a price point with anything close to IBM system performance. The upgrade path is obvious and compelling, and offers a new and invitingly low point of entry. It's probable that no vendor can rally the economies of this advanced very large scale integration, robotic production efficiency, huge scale buying and high-hurdle-blocked anti-copy design. FOUR MICROCOMPUTER SYSTEMS Personal System/2 Models 30, 40, 50, 60. TECHNICAL BACKGROUND. These four new systems share several key attributes. All are manufactured in a "dark" plant using surface-mount technology and robotics -- the only thing going in is energy. The result is low overall component costs, low cost per connection and very high production yields for a very reliable family of products. All four new systems have complete complements on the mother board, including serial and parallel ports (one each), a real- time clock-calendar and RAM. The mother board functions have been integrated at a high level -- as few as four VLSI chips. Graphics (a new standard through a new connector) support at least 640x480 with all-analog color displays showing 16 colors from a palette of 64 colors. All use the new IBM 1 MB RAM chips. All parts but the CPU are built by IBM. The ROM includes a "junk code" fingerprint, which certain CPU functions must see for the system to operate -- and IBM legal will come down fast and hard on any other machine it finds with the code embedded. Since the code is part of what the VLSI mother board looks for, engineering a way to get around the code involves both reverse engineering the VLSI and decoding the ROM, then finding a functional equivalent that still perfectly mimics other functions. IBM is placing its focus secondarily on connectivity (no surprise), and primarily on throughput. The combination of an accelerated graphics interface and an accelerated drive interface makes clock speed less indicative of system performance than ever. Couple these to 1 wait state for RAM access, a wide bandwidth bus (using balanced lines for reliability) and processing that keeps pace beat-for-beat with the CPU for an idea of where their new engineering makes a difference. 3.5-inch floppies in 760K and 2 MB unformatted/1.4 MB formatted enter the fray with these announcements, although it's unclear as to which boxes will sport which drives, and as to whether media built for Macintosh can successfully format to the new high density standard. Also out is a new DOS, CP/DOS, to make everything sing -- if you don't mind a slow song. CP/DOS version 1.0 runs a bit sluggishly; PC/DOS and EMS/EEMS can run faster on the new machines. Estimates of IBM's costs are about 85 cents each for RAM chips, $2 each for the VLSI motherboard chips. The manufactured cost of the most expensive of these systems is supposed to be less than $150. While the list price prices of the new products are going to be extremely low, and the street prices even lower, IBM's costs are ridiculously lower than either, even in proportion. Example: a 4:1 markup to distribution of a $150 cost results in a dealer price of $600, a list price of $1000 with 40% margin or $1500 with 60% margin. The margin is apparently there as a pad. IBM seems ready to drop prices a bunch as soon as a first clone comes out, even if it's within the first half year after launch. Even at launch prices, the price/performance is unbeatable. These systems are a remarkable parlay of performance at a scary low price. IBM has a new graphical interface, with which current application software and Windows-compatible applications are upward compatible. Windows-compatible packages can exploit the full resolution, other applications only the subset which they currently provide. The difference in performance between this new accelerated IBM graphical interface and Windows will be painfully obvious in any side-by-side comparison. Model 30: Code name "Flashlight" with one 3-1/2 inch floppy drive. Code name "Palace" with two such drives. 7.54 MHz. Three horizontal slots. Starts under $1500, possibly with monitor in bundle. 8086 CPU. Despite its 8-bit CPU and clock speed, it outperforms PC/AT systems on throughput. This is because of accelerated graphics and accelerated disk controller. The chip complement: 4-VLSI motherboard, 9 RAM, 1 CPU. Mother board includes serial, parallel, real-time clock/calendar. Graphics supports 640/320 x 200 in color, 640x480 in monochrome. Lower resolution modes act as exploded section of higher resolution display. Small footprint. Aimed at clones, also aimed at Macintosh - outperforms both. Model 40: Code name "Trail Boss". 10 MHz. 80286. 3-1/2" floppy, 20 MB hard disk. Small footprint. Mother and slots like the 30. Is to the 30 what XT was to PC, except full 640x480 (or better) color graphics support. Later, after launch, kit will populate mother board for Token Ring or LU 6.2; back panel knock- out for connector. Model 50: Code name "Rough Rider". Too big for desktop - vertical-mount tower. 80286. 10 MHz. 1.4 MB floppy. 20 MB hard disk. 8 slots perpendicular to mother board. Possible that 50, not 40, may be first mother board with room for Token Ring or LU 6.2 kit. Can outfit as file server. Super throughput even with 286 and 10 MHz pits it against most currently announced/ available 386 contendors. Model 60: Code name "Wrangler". 80386. 16 MHz. 1.4 MB floppy. 40 MB hard disk. As above, but 2 MB RAM on mother board. Four 16-bit slots, three 32-bit slots. As described, list price less than a current PC/AT. Throughput improvements versus Deskpro 386, PC's Limited et al give this a better than 2:1 performance advantage. ALL FOUR MODELS WILL BE IN STORES APRIL 2. The outlook for the aftermarket: This is not a good time to be an IBM competitor. It's an extremely good time to be one of the few dozen vendors close enough to the company to get invited to the Doral Country Club in Miami. A normal defensive move for competing PC system vendors might be to rally behind Compaq and other major branded competitors and try to create a "PC-inspired" splinter standard; unfortunately, that means selling less performance at a higher price, much less performance at a competing price, or equivalent performance at a much higher price. Many branded vendors and many clone makers will shake out in the wake of IBM's aggressive price and performance. Many will try to reconfigure systems to such specialized uses as file servers and UNIX -- but IBM may be doing that as well. Who's safe? Some peripherals can escape unscathed: printers, modems, plotters, page scanners. Some peripherals may be up a creek: monitors especially. All add-in board vendors will have to address bus differences. This puts a lid on future expansion of 384K multifunction cards beyond the 15 million PC installed base. Graphics cards for old standards will be a replacement only commodity. There's some room for port expansion products, but not much. The improvements in Token Ring raise the ante for splinter LAN standards, and mean difficulty for even established LANs. Software developers will find the migration easy and fruitful, and most existing packages will run as-is. We do not know if Flight Simulator runs. System vendors would do well to establish and exploit whatever visible technical differentiation they can create. Toyota may have been a knockout punch to Detroit, but GM is still in business. Non-IBM dealers are going to have an especially difficult time surviving if they cannot escape a PC-compatibles emphasis on their sales.  on the new machines. Estimates of IBM's costs are about 85 cents each for RAM chips, $2 each for the VLSI motherboard chips. The manufactured cost of the most expensive of these systems is supposed to be less than $150. While the list price prices of the new products are going to be extremely low, and the street prices even lower, IBM's costs are ridiculously lower than either, even in proportion. Example: a 4:1 markup to distribution of a $150 co