As Sun Microsystems prepares to kick off its first major European conference in Berlin this week, analysts signalled that if the company wants local users to bask in its particular brand of computing, Sun needs to shed light on how its new low-cost turnaround strategy fits in with an increasingly varied product line.

Although Sun has long prided itself on being a maverick player in the industry, specialising in high-end systems fitted with its Solaris operating system and Sparc processors, increased demand for cheaper, low-end servers has prompted a change in direction.

Facing mounting competition from low-end providers like Dell and Hewlett-Packard (HP) and precipitously declining revenue, the company has been inching toward lower-cost computing, showing off servers running Linux and Intel chips, for example.

How Sun's new - and some say rather late - interest in the low-end market fits with its past emphasis in serving up more costly, high-end systems remains to be fleshed out, analysts say.

When SunNetwork Berlin gets under way Wednesday, the company "needs to explain their new initiatives in terms of rolling out products and show that they are really as committed to Linux as they say they are," said Illuminata analyst Gordon Haff.

However, Elie Simon, president of Sun for Europe, the Middle East and Africa, thinks that the company's commitments are clear.

"At the end of the day customers will buy a platform because of cost and overall performance," said Simon. Whether customers need powerful, high-end systems running the company's Solaris operating system or low-cost Intel-based servers, Sun is now looking to fill this range of needs, he said.

"It's not about getting our foot in the door to sell high-end systems later on or outdoing competitors, it's about filling demand," he said.

According to IDC analyst Chris Ingle, Sun had to take this approach to stay in the game. Previously, "one of the benefits of being a Sun customer is you knew what they would sell you when they came in the door. But customers started asking for these low-end systems and they had to respond," he said.

This new come-one, come-all approach has been paired with an aggressive pricing initiative that the company hopes will fuel its market turnaround.

Further underscoring the wind change, the company broke its stock quarterly announcement schedule to tout two significant deals at the Comdex trade show in Las Vegas last month.

In a keynote address, Sun CEO Scott McNealy announced a partnership with Advanced Micro Devices (AMD), saying that the company plans to roll out a series of servers based on AMD's 64-bit Opteron processors in an effort to play to the fast-growing market for low-end x86 servers.

In fact, a heightened demand for these servers played a role in Sun's slipping market share, according to IDC. The analyst firm said last week that Sun's place in the server system market fell to 10.8 percent in the third-quarter of this year, compared to 12.1 percent for the same period last year.

Sun is hoping to battle this market loss by feeding Linux cravings with its new Java Desktop System. In the second major Comdex announcement, McNealy trumpeted a deal with China Standard Software Co. to develop computers based on the Linux-based Java Desktop System. The agreement could potentially result in the software being installed on millions of computers in the People's Republic of China, McNealy said.

And similar deals are expected to be hammered out in Europe in the near future, according to Simon, as the company shops around its low-cost Linux push. These initiatives may be even more crucial as the company sings its new tune in Europe, where the market for Linux is more fertile than North America, analysts said.

Grid computing is also growing faster in Europe than in North America, according to Simon, and the company's ability to show its agility in these areas could win it some profitable new contracts.

But having unveiled these fresh initiatives, the company still has to clarify how its low-cost strategy will strengthen its bottom line, according to analysts.

"Sun needs to show how it can get back on solid footing in the near-term, not over years," said Haff.

Simon appears well aware of this concern, admitting that the number-one question SunNetwork Berlin attendees will have coming in the door is: Are you near a turnaround? "The answer is probably, if we do a good job," he said.

Sun is banking on attracting previously untapped markets, including cash strapped governments and smaller businesses, with its new low-end offerings. But already, some analysts are questioning whether customers will be confused by Sun's swelling product line.

For instance, Gartner analysts wrote in a recent research report that while AMD will clearly benefit from Sun's endorsement of its 64-bit processor technology, it is unclear how Sun will benefit since it will have to fit the Opteron-based products into an already crowded server line.

Sun remains committed to its Sparc chip technology and is still offering Intel processors in some of its high-volume servers. As a result, Sun will be challenged to fit Opteron into its server line "without generating confusion in the sales organization or general market," the Gartner analysts wrote.

Simon concedes that there "will clearly be a need for some customer education" to explain the benefits of different offerings but said he has no fear about the low-end products cannibalising its traditional offerings.

"If someone has to cannibalise, we figured we would do it ourselves," Simon said. He insisted, however, that there is still strong demand for high-end systems.

When the 7,000 registered attendees of SunNetwork Berlin file into the city's ICC conference centre this week, there will likely be a full range of products on show and plenty of opportunity for Sun executives to explain exactly where they are headed. McNealy is scheduled to give a keynote address on Wednesday, with executive vice president and chief technology officer Greg Papadopoulos set to take the stage Thursday.

The show has already sold out, according to Simon, with attendees coming from 52 countries and five continents. "The customer response rate has blown every expectation," he said.

But the real question may be whether Sun's response to their questions - particularly around the company's future - will do the same.