IBM Targets Home, School With Low-Cost PC

SAN FRANCISCO —  In a bid to expand its presence in the education, home and small-business markets, IBM on Tuesday introduced a small, low-priced personal computer that is expected to compete with equipment made by Tandy Corp. and Apple Computer.

The new Personal System/2 Model 25 is the lowest-priced offering of the Personal System/2 line of computers unveiled by IBM in April. IBM officials said the model, priced at $1,350 with a built-in black-and-white monitor and $1,695 with a color monitor, is aimed at students, teachers, school administrators and business professionals working in their homes and offices.

IBM’s announcement came just one day after Tandy introduced its 1000 HX model priced at $699. Tandy officials, too, said they are aiming at the home, education and small-business markets with their new machine.

Some analysts were skeptical about IBM’s ability to increase its share in the elementary school and high school markets, where Apple’s Macintosh is the leading personal computer.

“The education market is only a 10% growth market, compared to 30% in the business market, and I don’t expect IBM to make inroads at Apple’s expense,” said Bruce Lupatkin, an analyst with Hambrecht & Quist Inc., a San Francisco brokerage. Estimating Apple’s share in that market at 65% to 70%, Lupatkin said IBM could gain at the expense of Tandy, which has a 15% market share.

He also speculated that IBM--by improving upon its disastrous previous offering in the educational market, the PCjr, and by narrowing Tandy’s price advantage--will make gains among college students and faculty. The PCjr was pulled from the market in early 1985 after users complained, among other things, that it was not powerful enough and that it could not run much of the software written for the IBM PC.

“We did not have a strong family of products in the education market; now we do,” said Proctor Houston, an Atlanta-based director of marketing for IBM. “There are 44 million public school children, and there’s loads of money being spent. This product will be a win for the schools and a win for us.”

With special discounts for educational users, the price of the Model 25 could be as little as $800 to $1,100, said Richard Gough, an IBM spokesman. It is 40% smaller and twice as fast as the basic IBM PC, he said.

IBM also unveiled another computer Tuesday, a new version of its PS/2 Model 80, costing $13,995. That machine, IBM said, has 2 1/2 times the storage capacity of the original model.