Sun to launch low-end servers

SAN FRANCISCO: Sun Microsystems Inc. said it would introduce on Monday

entry-level network computers with its newest microchip to take on commodity

servers running Microsoft Corp. Windows operating systems.

Sun is known for its high-end machines, while "Wintel" machines

featuring Windows and running on Intel Corp. microchip-based machines are

increasing their performance, raising the threat of servers becoming commodities

like personal computers.

At the moment, though, Wintel servers are still considered low end.

Sun will bring its UltraSPARC III microchips to the low end, the firm said on

Friday, announcing a teleconference. "New UltraSPARC III servers to squeeze

the Wintel server market," Sun said. A spokeswoman declined to give further

details.

Salomon Smith Barney analyst John Jones wrote in a research note anticipating

the launch that replacing current low-end machines with ones using UltraSPARC

III processors could improve profit margins. Entry-level computers account for

21 percent of Sun's revenue, he said.

Sun shares were up 5.41 percent to $10.53 in a mixed technology market in

late Friday trade on the Nasdaq.