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Technology Stocks : Compaq

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To: hlpinout who wrote (46406)4/16/1999 8:24:00 AM
From: hlpinout  Read Replies (1) of 97611
 
Post-PC Era Needs A Vision, Expert Says

Story Filed: Friday, April 16, 1999 7:14 AM EST

Apr 15, 1999 (Tech Web - CMP via COMTEX) -- Donald A. Norman is worried. As a guru of
the post-PC era and as the keynote speaker at the upcoming Embedded Processor Forum (to be
held May 3-6 in San Jose, Calif.), Norman knows that there is a massive change under way in the
information-technology industry, but the revolution is not going well.

"We don't know how to get the appliance market started," said Norman in an interview at his home
office in Atherton, Calif.

The information appliance appeals most directly to "late adopters" of technology, defying the typical
pattern of market acceptance of any new product. And the new gadgets have conflicting technology
requirements: they must have high quality, yet low cost.

"That's what our poorstart-ups face -- problems with high-priced technologies and fickle consumer
behavior," said Norman. "Gating technologies like displays are too expensive. For example, my Palm
device has a really lousy screen and the backlight is no good, but that's because they wanted to
make the device low cost and let it get a month's life out of two AA batteries."

But in the coming world of Internet TVs, smart cellular phones and other digital consumer
paraphernalia, such trade-offs are not intuitively appreciated by the targeted customers. "We are
trying to get into people's lives, in their living rooms," said Norman. "We are targeting a market
where you go directly to the late adopters."

Norman is principal of consulting firm Nielsen Norman Group and author of several books on design
including The Invisible Computer (MIT Press, October, 1998). He consults widely and sits on the
boards of eight companies, at least three of them start-ups trying to make their fortune in the coming
era of information appliances, the low-cost, network-centric devices that will supposedly supplant
the desktop computer.

Companies Are Struggling Market watchers agree that many companies are still struggling in the
nascent market for information appliances. "That perception is true. This market has a variety of
problems," said Greg Blatnik, an analyst with Zona Research, in Redwood City, Calif. Many
systems are proprietary, lack a full set of services and "many of these devices have no keyboard and
not much of a display, so they aren't really useful for much of anything," he said.

Richard Doherty, president of the consulting firm Envisioneering, in Seaford, N.Y., singles out the
class of Windows CE handhelds for particular disdain. "They are too expensive and too
disconnected. They are all jokes," Doherty said.

The picture isn't entirely bleak. Zona estimates that as many as 3.8 million information appliances will
ship this year, a group of Internet-literate gadgets that includes set-top boxes, handheld computers,
mobile phones and pagers. "That's not an off-the-wall estimate," said Blatnik. "One company we
work with thinks it will ship a million Net-ready set-tops this year. That may be optimistic, but if they
are right the market could be bigger than we think."

Voice recognition promises to be a huge enabler for the category, overcoming screen and keyboard
limits, Blatnik said. And Doherty also believes that by 2002 tens of millions of Internet-ready
wireless devices will be on the streets.

Still, Norman said, other issues stand in the way of the dawning on the post-PC era. "There has to
be effortless communications between devices, and that requires standards," he said. "The problem
is we have too many standards, and I think standards need to be mandated by a fiat.

"The Internet Protocol gets us three-quarters of the way there," he continued. "Bluetooth [a
low-cost, short range RF scheme] is interesting as a low-level part of this. HAVI [Home
Audio/Visual Interoperability; software developed by Sony and other consumer companies] is
another part. Hewlett-Packard's Jet Send is a nice handshaking protocol and Sun has Jini [a
Java-based scheme for distributed computing]. Jini combined with Bluetooth and Jet Send is one
powerful approach."

Another form of communications -- links between engineers and marketers -- will also be required
for success in info appliances. "The computer industry and the consumer industry are technology
centric," explained Norman. "That's why computers are so complex and why programming the
VCR has become a national joke.

"Usability has to be built in from the beginning, like quality," he said. "Engineers have to work with
marketing, especially as we move toward more consumer products. That's hard for electrical
engineers because they sometimes believe the marketing kills the products. [But] the human is part of
the system. That's not a novel concept, but it is still novel in many product-development cycles."

The tyranny of price these systems feel is perhaps nowhere more apparent than in the startup
FreePC, which plans to give Compaq desktop computers to consumers who will provide detailed
marketing information about themselves and accept a computer that carries a constant stream of
advertising on the margins of its display.

"It's pretty invasive and you give up a lot of privacy, but they are honest and up-front about that,"
said Norman who is consulting with FreePC founder Bill Gross toward developing new spins of his
idea. Norman claimed the concept of "giving away" computers like cell phones will not undermine
the essential hardware business. Gross pays Compaq "a reasonable price" for its PCs, he noted.


Another obstacle on the way is whether designers will recognize the new paradigm when it arrives, a
hurdle over which even gurus can stumble.

"Apple actually funded the work at the University of Illinois on developing Mosaic, and when they
showed the browser to us [and offered it to Apple as a product], we turned it down," said Norman
who was at the time head of Apple's Advanced Technology Lab. "When I first saw the browser I
laughed and said they didn't know about all the research into hypertext that showed how people just
get lost. Every new technology has the problem that at first it looks very primitive."

Despite past and present problems, Norman said he remains convinced the post-PC era is at hand.
He rattled off a short list of announced info appliances that, while imperfect, validate the trend in his
mind. "These are just the beginning of the efforts," he said. "I am a firm believer in appliances."

Copyright (C) 1999 CMP Media Inc.
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