PC industry wakes up to the Internet appliance
By Therese Poletti
LAS VEGAS, Nov 17 (Reuters) - The personal computer industry is
finally waking up to the vision espoused by two computer industry
rebels who have long voiced their dislike of the PC in favor of simple
Internet appliances.
Larry Ellison, the chairman and chief executive of Oracle Corp. (NasdaqNM:ORCL - news), created the
concept of the network computer several years ago, amid much fanfare and media attention, while the
PC industry scoffed.
Sun Microsystems Inc. (NasdaqNM:SUNW - news) Chairman Scott McNealy has long advocated
alternatives to the ''hairballs of code'' he says make up Microsoft Corp.'s (NasdaqNM:MSFT - news)
Windows operating systems.
Now, at this year's Comdex, one of the PC industry's biggest trade shows, the Internet appliance and a
whole plethora of gadgets and devices that promise fast and easy access the Internet, are the talk of
the show.
''I don't come here very often. I'm not really into the PC thing. I don't know if I've shared that with you
before,'' McNealy said in his keynote address on Wednesday, amid laughter from a crowd used to his
Microsoft jabs. ''I don't hate PCs. I think they are a good thing to keep people off the street.''
The sprawling show was a mass launching pad for a slew of appliances, both from new companies and
the old guard PC makers, who don't want to be left out.
At a show usually dominated by PCs, Palo Alto, Calif.-based Sun had a booth on the show floor,
showing its new network appliance for businesses, called the Sun Ray, and its free Star Office software,
a rival to Microsoft's Office suite.
International Data Corp., a Framingham, Mass.-based research firm recently predicted a rapidly growing
market for appliances, with a 76 percent compounded annual growth rate.
IDC forecast a $15.3 billion Internet appliance market in 2002, up from $2.2 billion in 1998, and that 18.5
million appliances will ship in the United States in 2001, vs. 15.7 million home PCs.
''This is the wave of the future,'' said Adam Grill, president of Odyssey Group, a consulting and investing
firm in Setauket, N.Y. ''If vendors can't grasp the information device, computing beyond the PC, they will
not survive into the millennium.''
National Semiconductor Corp. (NYSE:NSM - news) of Santa Clara, Calif., hosted an Information
Appliance Pavilion, where attendees crowded around a band called ''The Device Girls,'' but also
wandered the space to look at the many sizes, shapes and colors of the latest gadgets to wake up the
industry, many from a new group of start-up companies.
Cellular phone companies also previewed Web-enabled cellphones, to access text data from the
Internet.
Companies and analysts predict that home computer users will have a small, low-cost device in every
room, but most agreed that the PC will not die. Bill Gates, the chairman of Microsoft, forecast that in
the home, the PC will be more than a desktop computer, it will also act as a server, storing much of the
information on a home network.
Microsoft also unveiled a low-cost Web Companion, which several computer makers have agreed to
manufacture, as a direct Internet access appliance, with instant Net access, via Microsoft's MSN
service. Emulating the cellular phone business model, companies will either charge a very low price for
the device or give it away, and MSN will gain new subscribers paying $21.95 a month.
The computer makers who are developing the appliance, such as Compaq Computer Corp. (NYSE:CPQ
- news), Acer Inc. and Vestal USA, a unit of the Turkish consumer electronics company Vestel , said
they will also bundle their devices with other online services as well.
Most of the new devices are stand-alone, dedicated appliances, with a single function, much like a set
of appliances in a kitchen, with the aim of providing fast, easy access to the Net.
At one panel, a debate raged on whether the appliances were just PCs and the Internet on ''training
wheels,'' as portrayed by Craig Mundie, a senior vice president of Microsoft, or if they would lead to
world of one-function devices and fewer Windows PCs.
''What we want are impersonal computers,'' said Bill Joy, a co-founder and chief scientist of Sun. ''It
shouldn't belong to anybody. We want to walk up to it and use it. I do not want to spend all that time
personalizing it.''
More Quotes
and News:
Compaq Computer Corp (NYSE:CPQ - news)
Microsoft Corp (NasdaqNM:MSFT - news)
National Semiconductor C |
