With prices beginning at $1,499, IBM's new ThinkPad I Series will go head to head against Toshiba Corp.'s 500 series notebooks and Compaq Computer Corp.'s Armada PCs.

Though IBM dominates the high end of the notebook market, the Armonk, New York, company is behind Toshiba, Compaq and Dell Computer Corp. in overall US sales, according to market research company Dataquest.

Set for release in November, the ThinkPad I Series is pitched at the US retail sector, where IBM was ranked sixth in the second quarter behind Compaq, Acer Inc., Toshiba, Packard Bell NEC Inc. and Fujitsu Ltd., according to Dataquest, which is based in San Jose, California.

Analysts said the technology and price of the I Series, combined with the reputation of the IBM ThinkPad brand, should see it quickly gain ground in the retail market and helpIBM push along overall notebook sales.

"What will rock the industry ... is that it's at a price that is extremely affordable, with the IBM brand," said John Dunkle, an analyst with market research company Workgroup Strategic.

"I think you'll start seeing some impact to Toshiba's sales in the fourth quarter. ... You'll see some severe impacts next year," Dunkle said.

IBM is marketing the I Series as a mobile second or third PC for small businesses, students and families. The ThinkPad has long been a favorite with big corporate clients, but starting at around $2,000, it has given sticker shock to many individual buyers.

Purchases of notebooks for home use represent only around eight per cent of total PC sales, according to Dataquest. But retail sales to small business owners, free-lancers and other business people are a growing market and a notebook niche IBM is targeting, Dataquest's Scott Miller said.

With three models, the I Series has high-quality active matrix screens as large as 13.3 inches(34cm). The computers are powered by Intel Pentium II 266 Mhz or Pentium 266 Mhz chips.

Key to the success of the I Series is IBM's ability to get the machines onto the shelves of retail chains alongside Toshiba and Compaq models. If IBM can get its trademark black boxes into the shops, then the I Series should see plenty of buyers, Miller said.

"The ThinkPad brand holds quite a bit of sway in the minds of small business people and consumers," Miller said. "IBM's entrance into this market will have a substantial impact."