To: D.J.Smyth who wrote (159877 ) 8/21/2000 12:17:09 PM From: calgal Respond to of 176387 Dell hears the music Dell, meanwhile, is putting together a plan to deliver a set of offerings, ranging from Net access to networking hardware, that will allow PCs and appliances to interact and share content over a network. "There are going to be a bunch of appliance (categories) that we are going to play in," said Stephan Godevais, vice president of Dell's Home and Small Business Group. The first category is music. Dell's Digital Audio Receiver, priced at $199, will ship later this month. The device attaches to a network and uses it to download and play audio files, such as MP3. Dell is also investigating similar appliances in such categories as video, photography and gaming, Godevais said. According to sources, Hewlett-Packard Co. (NYSE: HWP) is also eyeing the consumer appliance market -- drawing up a business plan that includes creating a new business unit that reports directly to CEO Carly Fiorina. Why are so many tech heavyweights mobilizing to enter a hitherto lightweight market? Clearly, as Microsoft's Visse pointed out, PC makers foresee that the PC market will not sustain its current levels of growth forever. Moreover, PC penetration hovers at about 50 percent of U.S. households and even less in European and Asian countries. As a result, PC manufacturers have begun changing their product mixes to deliver more appliancelike offerings. None of the PC makers interviewed by ZDNet News believes the appliance will displace the PC. However, they do believe the appliance market will augment the PC while simultaneously augmenting their revenues. Gateway saw 40 percent of its second-quarter earnings come from non-PC-related products, namely training; its Internet service provider service, Gateway.net; and financing through YourWare. However, Net appliance revenues could boost this percentage as Gateway offers AOL's some 22 million members alternate devices with which to access their e-mail and other services. Still, is the market for Internet appliances large enough to support the many major players that are about to enter into it and inundate it with devices? The entire appliance market -- including handheld devices, set-top boxes, game consoles and Web terminals -- has the potential to grow into a $17.8 billion, or 89 million unit, market by 2004, predicts Bryan Ma, an analyst with International Data Corp. zdnet.com zdnet.com