Will AOL Enter Cheap-PC Market?

Microworkz may build inexpensive AOL-brand PCs, says MSNBC.

Mary Lisbeth D'Amico, IDG News Service

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Rick Latman, president and chief executive officer of Microworkz, told MSNBC yesterday that AOL executives were in talks on a possible computer deal with Microworkz, according to a report on MSNBC's Web site.

Although MSNBC also quoted other sources as saying that AOL may even be interested in acquiring the Lynnwood, Washington-based company, Latman denied that. The report said that AOL executives declined to comment on the speculation.

Microworkz has just launched the iToaster, a bare-bones personal computer that looks like a stereo component and sells for $199. Rather than Windows, the iToaster features its own proprietary operating system, which combines elements of the BeOS and Linux operating systems.

The iToaster, which does not include a monitor, is scheduled to ship July 15.

The potential AOL-Microworkz deal was even mentioned this week in the closing testimony of the Microsoft antitrust trial. In closing statements, Microsoft's lawyers used the report as evidence that Windows does indeed face competition from new rivals in the market.

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