Umax Reenters Shaky PC Market

Scanner vendor's return to PC sales during tough times baffles analyst.

Tom Mainelli, PCWorld.com

When Umax announced this week it is reentering the PC market with a new Pentium-4-based system, analysts scratched their heads. Why would the company, best known for its well-reviewed scanners, return to PC sales during one of the nastiest slumps in the industry's history?

To sell more scanners.

"We wanted to offer the whole solution," says Christopher Yang, business development manager at Umax. "We want to complement the scanners... to offer another [PC] option to our scanner customers."

For now, Umax markets a single PC online. The P414 includes a 1.4-GHz P4 chip, 128MB of RDRAM, NVidia's TNT graphics, a 48X CD-ROM drive, a modem, and Windows 98 Second Edition for $898. It does not include a monitor.

The P4 processor is geared toward strong graphics performance, which makes the system a great match for any of Umax's scanners, Yang says. He envisions people purchasing the PC to go along with midrange scanners such as the $1000 PowerLook 1100.

Don't Fear, Dell

Umax doesn't have grand plans to take the PC industry by storm with its new system, Yang says. However, if initial sales do go well, the company will probably add configurations down the road.

That may be a bit optimistic, says Anne Bui, senior analyst of personal systems at IDC.

Bui questions the wisdom of any company entering the PC market now, when industry stalwarts such as IBM and Compaq are focusing on new areas such as storage--and away from PCs--to make money. Still others, such as Gateway, are cutting back on expansion plans in an effort to find long-term stability.

"This is the first legitimate technology company to introduce a new PC in a long time," she says. Umax obviously feels its scanners offer it a way into the market, she notes.

"The company is likely hoping its scanners will reel in imaging folks," much the way Hewlett-Packard printers helped that company win PC customers several years ago, she says. But the imaging market is "a tough space to crack," and in down times such as these she expects Umax to have a rough go.

Why Trust Umax?

Umax's Yang acknowledges the PC industry's tough times, noting, "it's pretty bloody out there right now." But he says initial response from Umax customers to bringing back PCs has been strong. And because Umax didn't strand anyone when it left the PC business, customers won't have hard feeling, he says.

"We continued to support the PCs," he says. In fact, the company still offers technical help to customers with its PCs, he says.

Umax once sold both PCs and Macintosh clones. At the end of 1999 Apple ended its licensing program, and in the first quarter of 2000 Umax decided to stop selling PCs, too. That was despite its success in retail and direct sales, Yang says.

Umax decided then to focus on its strengths in digital imaging, Yang says.

Now that the company is giving PC sales another try, it's starting small. But Yang says he can envision more configurations, even built-to-order PCs, if sales are strong.

"If we go to built-to-order, we could offer so much more," he says. But that's down the road. For now, it's a single system, built one way, available solely through the Web site. "This is it for right now; we'll just see how things go," he adds.