Microsoft Forces New Game Plan at NewCom

NewCom Inc. in Westlake Village has missed the holiday sales season with its WebPal device for linking televisions to the Internet because it did not ship the product to retailers.

Sonia Kiarashi, NewCom’s vice president for sales and marketing, said the delay was due to Microsoft Corp.’s aggressive pricing of a competing product.

“We’re coming up with a game plan,” she said. “I don’t have a specific date.”

NewCom, which distributes computer accessories, bet heavily on WebPal’s success. In February the company committed to pay $16.5 million--about 150% of its net worth--for a contract to buy an undisclosed number of WebPals from an unnamed supplier, and it later paid a $3.6 million deposit.

However, Microsoft has placed its considerable financial muscle behind WebTV Classic. Consumers can buy it for $99 after a $100 rebate from the software giant. That’s less than one-third of WebPal’s planned $349 price tag.

“Microsoft coming into the game, with all their money, clout and determination, makes it difficult for a small player to compete,” said Kevin Hause, an analyst with International Data Corp.

Microsoft expects to sell 250,000 WebTVs by year’s end.

Meanwhile, NewCom announced that it expects to report record revenues and profits for the quarter that ended Nov. 30. Based upon preliminary data, revenues exceeded $30 million, compared with $17.9 million in the year-earlier quarter.