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Industry Competition
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Compaq
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Compaq LTE 386s⁄20
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1990-06-24
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Confidential / Need to know
From: David Garr, Competitive Analysis
COMPAQ ANNOUNCES LTE 386s/20 NOTEBOOK
_______
SUMMARY
On October 15, Compaq announced the LTE 386s/20, the smallest computer to
incorporate the 20 MHz 386SX processor. The LTE 386s/20 weighs 7 1/2 pounds,
which is almost a pound heavier than the previous LTE machines. The 2 MB RAM,
30 MB hard disk configuration is priced at $6,499. It will be available in
limited quantities in October.
Although the LTE 386s/20 will reinforce Compaq's image of offering the latest
technology, we think its sales will be limited. Its high price will discourage
many customers who are looking for a second computer for the road.
_________________________________________________
WHAT HAPPENED: SPECIFICATIONS OF THE LTE 386s/20
The LTE 386s/20 is the new high-end of the LTE family, priced $2,500 more than
the LTE/286. The LTE 386s/20 weighs 7 1/2 pounds and measures just 8 1/2 by 11
inches, and is 2 1/4 inches high. It comes equipped with 2 MB of RAM, a
3.5-inch floppy drive, and VGA graphics. The 30 MB hard disk configuration is
priced at $6,499 while the 60 MB configuration is priced at $6,999.
The LTE 386s/20 incorporates a VGA screen (which is much better than the CGA
capabilities in the previous LTE machines). Compaq estimates its battery life
at 3.5 hours.
1 MB and 4 MB memory upgrade cards (the size of a credit card) are optional.
Memory for the LTE 386s/20 is expandable to 10 MB (if two 4 MB upgrade cards
are added).
Compaq is touting a number of innovations with this notebook computer:
* It uses a 2 1/2" hard disk drive, which Compaq claims is the first drive of
this size to hold 60 MB. Compaq compared its size to a deck of playing cards.
* A desktop expansion base is priced at $1,499. The LTE 386s/20 can be
slipped into the base and take advantage of two ISA expansion slots and any
peripherals attached to the base, such as a color monitor or a full-size
keyboard. Compaq hopes that many people will buy the LTE 386s/20 as their
primary computer and use the expansion base to create a system that works like
a regular DeskPro.
* The LTE 386s/20 incorporates a printed circuit board technology called
Regal (rigid epoxy glass acrylic laminate) Flex. It reportedly saves space and
weight and ensures better reliability of circuit boards.
The following chart shows that the LTE 386s/20 offers faster performance, more
memory, and better screen resolution than the LTE machines Compaq introduced a
year ago. However, the pricing is also much higher. Also listed is the new
Sharp notebook computer which has received excellent reviews for its small size
and weight.
Processor RAM Disk Graphics Weight Dimensions Price
HxWxD (in)
-----------------------------------------------------------------
LTE 8086 (9.5-MHz) 640KB 20MB CGA 6.7 lbs 1.9x11x8.5 $2,699
LTE/286 80286 (12-MHz) 640KB 40MB CGA 6.7 lbs 1.9x11x8.5 $3,999
LTE 386s/20 80386SX (20MHz) 2MB 30MB VGA 7.5 lbs 2.25x11x8.5 $6,499
Sharp PC-6220 80286 (12-MHz) 1MB 20MB VGA 4.4 lbs 1.4x11x8.5 $3,999
__________________
WHAT DOES IT MEAN?
The LTE 386s/20 brings a new level of performance to the notebook computer
catagory. Compaq claims that it is the "highest performance notebook personal
computer available" and that it "processes information up to 50 percent faster
than 16-MHz 386SX-based systems."
Compaq has introduced many innovations with the LTE 386s/20, such as the 60 MB
2 1/2" hard disk and the desktop expansion base. These advancements in
technology will further enhance Compaq's reputation for being on the cutting
edge of new technology.
Although one of Compaq's target markets is professionals using "windowing and
graphics-based applications," the LTE 386s/20, along with all laptops using
supertwist LCD screen technology, has slow screen updating. When a mouse is
being used, the cursor submarines when it is moved, and can be difficult to
locate. Therefore, we believe that Windows 3.0 will be awkward to use on this
machine.
In summary, we think that the technology of the LTE 386s/20 is leading edge.
However, we believe that sales will be weak because, compared to other notebook
computers, the price of the LTE 386s/20 is very high. Since many people
consider notebook computers for their second computer, in addition to the one
on the desktop, the $6,499 price could make it difficult to justify. We
believe that less expensive, lighter 286-based notebook computers like the
Sharp PC-6220 will have much higher sales than the LTE 386s/20.
We expect Compaq to lower the price of the LTE 386s/20 when competitive
386SX-based notebook computers begin shipping in a few months.
______________________
IMPLICATIONS TO APPLE:
* Diversity of mobile computers. Compaq now has three notebook computers
(LTE, LTE/286, LTE 386s/20), two portables (SLT/286 and SLT 386s/20), and a
transportable (Portable 386). Each of these machines appeals to a different
segment of the market, depending on the customer's desire for portability vs.
functionality. Companies which are trying to compete in the mobile computer
market face the challenging task of providing a wider variety of machines than
in the past.
* Advantages of the Macintosh Portable. The LTE 386s/20 is small and yet
offers many attractive features. However, it does not have the functionality
of the Macintosh Portable. It cannot run a graphical environment very well
(slow screen updating, no built-in pointing device). Its battery life lasts
about half as long as the Macintosh battery. It doesn't have networking built
in. It is more expensive. And most importantly, it is not a Macintosh, and so
it lacks the power, integration, and intuitiveness of the Macintosh.
______________________
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