Jun. 11 (The Dallas Morning News/KRTBN)--A new ad from Compaq Computer Corp.
tells the story: "A computer? That is so last century."
As the first year of the new century approaches the six-month turn, signs are
everywhere that the post-PC era is upon us.
While no one is shoveling personal computers into the trash bins yet,
traditional computer makers and upstarts alike are anticipating the market
beyond the beige box in smaller devices and so-called Internet appliances.
Products that eliminate pointing, clicking, dropping, dragging and other manual
gyrations will be highly prized, experts say.
Though thousands of new devices are expected to hit the market in the next five
years, the most successful -- and profitable -- will be those developed around a
service, not those looking for a reason to exist.
"It isn't about the device anymore," said Mark Smith, who leads the technology
project at HPLabs in Palo Alto, Calif. "What's central now is the service."
An appliance is a new kind of relatively low-cost PC designed for Internet
access and specialized business uses, but without the full range of functions
found in a home or desktop computer. Also called a device, these machines sell
for between $500 and $1,000.
Besides e-mail and Internet access, such an appliance or device will let you
check stock quotes, get the weather, find a movie review, work on a spreadsheet
or read a book.
Mr. Smith said the ideal appliance hides its complexity and fits into our own
mental models of usage. That is, using the appliance should be second nature,
much like looking at a watch to tell the time.
Some companies are thinking big: Hewlett-Packard is talking about appliances
that will use biometrics -- a fingerprint, the iris of the eye, facial features
or voice recognition -- to identify users.
Others are monitoring developments quietly without making major commitments.
Michael Dell, whose name is now synonymous with the PC, keeps tabs on the device
market but says he remains highly skeptical about what he's seen so far.
This much is certain: The Windows-Intel duopoly, referred to as Wintel, is past
its prime. No equipment maker can count on Microsoft's Windows operating system
and a chip from Intel Corp. as a sure-fire hit. Even Bill Gates, who once
thought there'd be at least one PC in every house, says software for non-PC
devices is the next big market.
It was a sign of the times last month when Gateway and America Online announced
plans for a Net device, also known as a Web pad. Powering the device will be a
chip from Transmeta Corp., an upstart semiconductor company. The operating
system will be based on Linux.
Demand for personal computers is still healthy, analysts say, even though
shipments this year are likely to be half the 35 percent growth rate of the
mid-1990s.
"We are still on an unprecedented, long-running consumer demand cycle for PCs,"
said Gabrielle Griffith, a research analyst with International Data Corp.
But 2002 will be the year when consumers buy more Internet access devices than
PCs, according to another IDC analyst, Kevin Hause.
Companies and investors betting on the trend are taking their cue from consumers
who realize that they don't need the latest, most fleet-footed piece of
expensive hardware just to collect and send e-mail. Computer makers have
estimated that general-purpose PC owners use as little as 5 percent of their
machine's capacity.
One company that has seized on the opportunity is Netpliance Inc., which is
aiming its Internet appliance at the estimated 54 million Americans who aren't
wired but are curious about the Internet. Kent Savage, president of the
Austin-based start-up, calls it the "My Mom Market."
Mr. Savage said Netpliance's business model is about service, not its
flat-screen, simple-looking i-opener appliance. "We don't talk about the device.
We talk about the experience," he said.
With the i-opener, there's nothing to boot up. There are no cables to couple or
manuals to read. The complexities of delivering fingertip services to the user
reside far away on Netpliance's back-end infrastructure.
About 20,000 households have "subscribed" since the first of the year to
Netpliance's Internet service. Most are stay-at-home mothers and women over the
age of 50. Mr. Savage said in these homes, the i-opener resides mostly on the
kitchen counter. Some are on bedroom nightstands. The next generation of the
device, he said, will look like a wireless tablet, suitable for using while
watching television or sitting on the porch.
Investors lately haven't been inclined to bet on Netpliance's business model.
The stock has been hovering between $5 and $6. The 52-week high is $26.12.
Qubit Technology of Lakewood, Colo., also is selling a non-PC Internet appliance
for the kitchen counter. The company said its wireless Web tablet, charging
cradle, wireless keyboard and modem receiver let home users with broadband have
all the benefits of the Internet "without the technical or convenience barriers
often associated with personal computers."
The Internet has been credited for creating a rush to innovate in the digital
age, from creating "smart" phones to "intelligent" refrigerators. New products
and technologies from new vendors seem to appear almost daily in the "post-PC
era."
IDC, the research firm, estimates that the worldwide market for Internet access
appliances will exceed 89 million units, or $17.8 billion, in 2004, up from 11
million units and $2.4 billion last year.
"As the Internet becomes more tightly woven into everyday life, an increasing
number of consumers will desire the applications and services it can provide,"
said Bryan Ma, analyst for IDC's consumer devices research program.
IDC's category of digital consumer electronics includes such Internet-enabled
devices as gaming consoles, NetTVs, smart handheld devices, Web terminals,
e-mail terminals and screenphones.
Compaq has introduced the iPaq pocket PC as its answer to the Palm, pitching the
device as "bringing true convergence" to customers.
Also, like other major computer makers, Compaq is shrinking the size and shape
of its PCs to cut manufacturing costs and to distinguish the product from its
competitors'.
The iPaq PC, which Compaq began shipping in January, weighs about 10 pounds and
takes up 75 percent less space than the typical Compaq PC. In recent remarks to
Wall Street, chief executive Michael Capellas said Internet access devices will
"cannibalize" traditional PCs.
How do the big computer makers know which device to bet on? Mr. Smith of HP Labs
thinks there will be a free-for-all in device development in the next few years
before the market's direction is clarified.
Sean Burke of Compaq's Presario line of consumer products said the Houston
company sends researchers into households to study how people use a PC compared
with a specialized device. Then designers study the latest design trends --
so-called form factors -- and try to get beyond the rectangular box.
"It became clear to us that people want a certain level of personalization,
which we try to get from design trends," Mr. Burke said.
As for whether consumers want multiple functions on a single device, or
dedicated devices, and whether they'll really want a smart toaster, or a
refrigerator that orders food, is anyone's guess.
"It's a tough question because we're getting into these areas with digital
devices that nobody has really gotten into before," said Mr. Burke.
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