The three companies largely responsible for the boom in personal computers in the workplace will team up to create a home computer for the 1990s that offers television-quality video and compact-disk-quality sound.
The companies hope to tap the potentially huge home market, which all but a few personal computer makers have abandoned.International Business Machines Corp. said in separate announcements last week at Microsoft Corp.'s Fourth Annual International Conference on CD-ROM here that it will work with software giant Microsoft Corp. of Redmond, Wash., and chip maker Intel Corp of Santa Clara, Calif., to create a "multimedia" personal computer.
"We're going to put a computer in every home," said James Cannavino, president of IBM's entry systems division. "With multimedia, we'll be able to appeal to a much broader audience - one that is used to television and stereo."
Cannavino announced last week that IBM and Microsoft will form an alliance to create new hardware and software that will lead to a multimedia home computer. Earlier, Intel and IBM announced they will work together to create chips, circuit boards and software to turn IBM's Personal System-2 computers into multimedia computers.
"If you put all this together, you get a great home PC," said industry analyst Stewart Alsop, editor of P.C. Letter of Redwood City, Calif. Alsop predicted IBM's home computer will be a modified PS-2 available in the first quarter of 1990 at a cost of about $2,700.
The home computer market, once dominated by Commodore and Atari, has been abandoned by larger computer makers such as IBM and Apple in favor of the more profitable business market. IBM is looking to jump-start the home computer market with a machine that offers more than word processing, spreadsheets and data bases.
A multimedia home computer could offer dazzling full-motion video games such as a jet flight simulator, access to volumes of information and a home shopping service to rival television's home shopping channels, Cannavino said.
Apple Computer Inc. of Cupertino, Calif., has also said it intends to turn its Macintosh personal computer into a multimedia computer with Apple and other add-on products. At a recent meeting, Apple chief John Sculley used a Macintosh to create a multimedia presentation highlighting events in Apple's history.
An important element in the multimedia computer is a compact disk acting as a read-only memory device that is capable of boosting personal computer storage more than tenfold. CD-ROM disks and disk drives allow personal computers to use a half-billion bits of information, compared with today's hard disks that typically offer 40 million bits.
CD-ROM disks - which look identical to disks used in audio compact disc players - can store digitized pictures, video and sound to be read by a personal computer and a CD-ROM drive. CD-ROM drives are available today for personal computers, but there is little software for the drives and most cost about $1,000.
Microsoft also announced a new CD-ROM standard called CD-ROM XA that is designed to make CD-ROM software development easier for other software companies. The new standard expands upon and partially obscures an older CD-ROM standard called CD-I. CD-I technology was developed by RCA's David Sarnoff Research Center and acquired by Intel.
One analyst attending the conference was surprised that IBM is moving into the young technology of multimedia.
"It's amazing the commitment IBM is making to multimedia," said Nick Arnett, a market analyst with Creative Strategies Research International of Santa Clara. "They usually wait for a technology to develop."
Paul Saffo, a research fellow at the Institute for the Future in Menlo Park, Calif., doubted the three-company alliance could lead to an interesting computer. "If the future of CD-ROM is pinned to the imaginations of IBM, Microsoft and Intel, we're in real trouble," Saffo said.