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One Hummer of a Laptop

Consumers in search of a laptop as hardy as a Hummer SUV will soon be able to buy a Hummer-branded computer all their own. And like the vehicle, it will be like little else on the market.

Hummer, a unit of General Motors (GM), has teamed up with Itronix, the Spokane (Wash.)-based manufacturer of rugged notebook computers, to offer a line of notebook PCs that will bear the Hummer brand and be sold in Hummer dealerships. And just like its sturdy namesake, the machine will resist drops, spills, and other unforeseen troubles that plague notebook owners everywhere.

If the tie-in isn't exactly clear, then you just aren't familiar with the market for rugged notebook PCs. Itronix is one of two leading manufacturers of this curious mobile-computing niche that was born out of necessity. When the U.S. Defense Dept. buys a computer for a soldier deploying to Iraq or Afghanistan, the machine will typically come either from Itronix or its larger rival, Panasonic, a unit of the Japanese electronic giant Matsushita (MC), which makes notebooks under the Toughbook brand.

MILITARY CONNECTION. These are portable PCs that can be dropped, shaken, spilled on, and otherwise abused in ways that would make a repairman's head spin -- and still keep on running. Market researcher Venture Development pegs the business at more than $1 billion, compared to about $45 billion for conventional notebooks PCs.

Matt Gerber, Itronix' vice-president of product development, says the company had been approached by GM to develop the machine. "They liked the fact that we develop machines for military personnel, and by coincidence, we were developing our first model that was to be a little more consumer-focused," Gerber says.

The result is the Hummer PC, a slightly tricked out version of Itronix' VR1, which looks like a relatively normal notebook with a few extras taken from its sibling devices aimed at soldiers and police officers.

But the Hummer-branded version sells for a little less and sports a colorful metallic shell on its cover, available in yellow, red, or pewter finishes that are identical to the colors available with a Hummer SUV.

"POLARIZING BRAND." "The Hummer brand is all about lifestyle," says Jay Ostahowski, Hummer's international marketing manager. "We were looking for a licensed product that could be a logical extension of that brand. A Hummer takes you places you can't go in any other vehicle, and this computer is one that you can take places that you can't take a normal PC. It's very aspirational and exclusive. Not everyone is going to have one, and that makes it a perfect fit with Hummer."

Itronix' Gerber called Hummer a "polarizing brand. You either love it or hate it," he says. "But there's a portion of the population who love the brand and the vehicle it represents, and those are the people we're building this PC for."

When it starts shipping on Nov. 1, the Hummer Laptop will sell for a starting price of $2,988. It will have an Intel (INTC) Centrino Pentium M processor running at 1.86 GHz and an 80-gigabyte hard drive that's easily removable. The VR1, which has a $3,329 price tag, is essentially the same notebook, but without the colored metal on the lid. The only real difference between them will be the warranty. The Hummer will have a one-year warranty, while the VR1 comes with a three-year warranty.

TAKING A BEATING. GM is going to sell the notebooks through Hummer dealerships and also through its Web site, where it sells branded accessories. Itronix is also taking advance orders for the Hummer machine through its Web site.

Why pay so much more for a rugged machine? To save on repair costs, the argument goes. One estimate by consultancy Technology Business Research places the average repair cost per incident at $2,900, which is more than the price of some commercial notebooks. Paying more for a notebook that doesn't break as easily saves money over the long term, fans say.

David Krebs, who tracks the rugged-PC market for Venture, says the failure rate of conventional notebooks can run as high as 60%, but that figure is "barely perceptible" for rugged systems. "The more frequently you pick it up and take it on the road and bang it up, the more likely you are to have a failure. Other companies will offer you all kinds of coverage to take care of repair costs, but you're still left without a machine in the interim. These rugged machines can stand up to that banging and save you the time and effort associated with getting repairs."

CAR-GADGET CONNECTION. Still, it's a small market by volume. Krebs figures that only 400,000 rugged notebook PCs are sold every year, and most of those are bought by government agencies and companies with employees who spend a lot of time outdoors. They sell for an average price of about $3,000 but usually boast a gross margin for their manufacturers of 40% to 50%.

It's not the first time that an automotive company has put its name on a computer or consumer-electronic gadget. Recently, Ferrari, the Italian sports-car manufacturer, teamed with Acer, the Taiwanese PC maker, on the Ferrari 4000, a notebook designed for speed. And in 2003, both Ford's (F) Aston Martin luxury-car unit and motorcycle maker Harley-Davidson (HDI) teamed up with Motorola (MOT) to sell specially branded wireless phones.

But the Hummer PC could crush them all -- literally, at least.


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