Maker of inexpensive computers reports a flood of orders

Richard Latman believes there is no such thing as a free lunch -- or a free PC.

That, he said, is why he is selling the Webzter Jr. personal computer for $299 (not including a monitor, which he will gladly sell you for an additional $99).

And at that price, Latman is getting orders for more machines than his 49 employees can churn out. When his Seattle company, Microworkz Computer, announced two weeks ago that it would sell inexpensive systems without ads or gimmicks, his phone lines and World Wide Web site were quickly jammed with inquiries and orders. "There's no free PC," he said. "It's a fallacy in the mind of Bill Gross." He was referring to the widely covered announcement by Gross' FreePC.com, a start-up company that plans to give away computers to people willing to have the PCS continuously display ads aimed specifically at them. Becoming eligible to receive one of the Gross PCS, though, involves filling out a personal questionnaire -- and not everyone who registers will get a PC. "Would I ask a million people for personal information so I can use it to sell to them?" Latman said. "No. I don't believe in that." Latman said he had already received orders for 50,000 of the $299 machines, which he intends to start shipping on April 19. To meet the demand for the Webzter Jr., Latman plans to add 80 employees and another 60 contract workers to assemble the machines, which use a Cyrix 300 MII chip and various off-brand components, include a 3- gigabyte hard disk and 56 kilobit-per-second modem. Microsoft Windows 98, the industry-standard operating system that retails for about $100 and comes already loaded on most more expensive personal computers, is not included with the Webzter Jr., which is promoted primarily as a Web-surfing device. (Windows 98 does come with the $99 CD-ROM drive that Microworkz offers as an attachment to the Webzter Jr.) With a profit margin only about $36 per PC, it will take a lot of sales to turn this into a successful business. But Latman, a former bond trader at Merrill Lynch, insists that it can be done. And that is not the only point, he contends. "Profitability is great," he said. "But the question is, how do we put computers in the hands of all the children?" Part of the affordability equation, he said, involves software. So Microworkz is trying to strike deals with software publishers to include free versions of their programs with these starter PCS, in hopes of creating future paying customers. The Corel Corp., for example, has agreed to offer its Word Perfect software as part of the deal. And the Internet service provider Earthlink Network is using the future-customer rationale to offer Microworkz users a free year of Internet access. Latman insists that his company will work through its backlog, so that everyone who has ordered a $299 PC so far will get one. By the end of the year, he hopes to be able to meet demand in this country and start marketing abroad.

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