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THESE MAY REALLY BE PCs FOR THE REST OF US

Are cheap, simple Net surfers the next wave?

When you get down to it, Net surfing isn't much different from channel surfing. Couch potatoes click a button to make new channels appear on the television. Mouse potatoes click a button to make new World Wide Web pages appear on the screens of their personal computers. Another similarity: On the Net, the heavy lifting is done by the Web page operator's computer--just as the broadcaster or cable operator pumps out movies, shows, and advertising that you receive on your inexpensive TV set.

Why, then, do you have to spend $2,000 for a PC to surf the Web? Answer: You don't. At least not for long. In that wide gulf between a $300 TV and a $2,000 PC, consumer-electronics companies from Akai Electric to Zenith Electronics and such computer makers as Apple Computer and Sun Microsystems are readying a wide array of products that are aimed at opening the Internet to the unwired masses. ``People want something that is easier to use,'' admits Steven D. McGeady, general manager of the Internet Technology Laboratory at chipmaker Intel Corp. In short, consumers want something more like a television--an information appliance that's cheap, simple, and welcome in the living room.

So far, the most high-profile candidate for the job is Oracle Corp.'s $500 Network Computer. It's the most ambitious attempt yet to create a standard for a Web-cruising computer. On May 20, the maker of database software announced that IBM, Sun, Apple, and Netscape Communications would support software standards that could result in a broad industry of interchangeable machines.

If all the companies promising to build products on the network-computer standard actually deliver, NCs will come in a dizzying array of shapes and sizes. As envisioned by Oracle Chairman Lawrence J. Ellison and his partners, the NC design will reduce the PC to bare bones--essentially a microprocessor, memory chips, a network connection, and a mouse, keyboard, or remote control for navigating and writing on a screen. With a network computer, you'll view Web pages on a computer monitor or a TV screen. There will be no disk drive, just a smart card for holding essential data such as user-identification information--and little or no software besides a small operating system. Instead, programs written in Java, Sun's software for networks, will come winging over the Net and run automatically.

OLD CLOTHES. In September, Britain's Acorn Computer Group PLC plans to ship NCs based on Oracle's prototypes, which it helped develop and manufacture. The first and most basic version is a nondescript box about 10 inches square and an inch high. Based on a low-cost microprocessor chip from Advanced RISC Machines, another British company, the under-$500 machines will use either a standard computer monitor or a TV. Instead of Microsoft Windows, it will have a compact operating system and will include a Web browser. Olivetti and IBM plan similar devices this year, too. And Sun will build desktop-computer-style boxes for corporate markets by this fall.

These models are just the start. Freed from the design strictures of traditional computers, NCs can take almost any form--and will. Indeed, most partners aiming at consumers plan to wrap network computers in the clothing of familiar products such as TVs, settop boxes, and phones. Phonemaker Uniden Corp., for instance, is planning cordless computer-phones with Internet access. This fall, Akai Electric Co. plans to start selling a $300 settop box with Internet-cruising capability.

The NC isn't the only stripped-down Net-cruiser concept. In April, Diba Inc., the Belmont (Calif.) startup, proposed its own series of products. They're based on the same underlying technology--a simple information appliance with just enough power and memory to carry out one job. The Diba prototypes consist of a series of single-purpose appliances such as Diba Internet, a TV-set add-on that lets people navigate the Web using just a remote control that hides a tiny keyboard behind a flip-up panel for typing in Web addresses.

Compared with other appliance wanna-bes, says Peter Bury, president of the U.S. technology arm of Britain's Cable & Wireless PLC, ``Diba has gone one step further. It said: `Let's recreate the computer into an appliance as easy to use as a coffeemaker.''' C&W is considering providing Diba Web-surfing boxes free to subscribers who sign up for Internet service, he says. Zenith Electronics has already signed a Diba deal--to build its technology into a new Web-cruising TV set.

SLOW GEAR. Another sleek Web-cruising design is emanating from Apple Computer Inc. Called Pippin, it's a stripped-down Macintosh computer that was originally intended to be a CD-ROM game player. Apple reworked the system to include Web-browsing and, in September, Japan's Bandai Co. will start selling the $600 machine in the U.S. At first, Apple planned to leave the Pippin manufacturing and marketing effort up to Bandai and other licensees, but watching the information-appliance movement gather steam, CEO Gilbert Amelio changed gears. He now says that Apple will market Pippins, too.

With this flurry of Internet-cruising development, you might think that the newcomers would be pulling ahead. But the information-appliance race has just begun. In fact, despite all the hype, both camps are, in effect, stuck in the starting gate. The reason: Before millions of ordinary citizens can start sampling the multimedia delights of the Web, somebody has to build much wider data pipes into their homes. Today, moving information and programming from the Web to consumers is painfully slow. Using a modem and an ordinary residential phone line, downloading material off the Web can be so pokey that many consumers think something is broken.

On the other hand, where the high-speed ``broadband'' networks already exist, the network computer is rapidly becoming a reality. Where is that? In corporations that are wired with local-area networks. IBM, Italian PC maker Olivetti, and Oracle partner Idea, among others, are scrambling to come up with inexpensive devices that will attach to corporate intranets. These machines could have a double payback: They'll be cheaper to purchase, and--more important--they can start to cut the high costs of keeping desktop computers up and running (box). ``This is a huge early opportunity,'' says Paul M. Horn, IBM's senior vice-president for research.

In May, Big Blue introduced a network computer, known internally as the Thin Client, to replace the terminals used with its popular AS/400 computers. Terminal makers such as Wyse Technology and SunRiver Corp. are also beefing up their machines with new chips and software in order to function as network computers.

In the long run, however, it's the millions of unwired consumers who have electronics, software, and computer makers staying up nights, plotting strategies for Internet appliances. ``We see the Internet really being an integral part of every home,'' says Phillip A. Watson, U.S. group counsel for Akai Electric. That's why the Japanese maker of TVs, VCRs, and stereo gear joined the ranks of info-appliance hopefuls.

Indeed, the consumer market is just too big to ignore. IBM is cautiously watching for the right moment to trot out designs it has in the labs--including a flying-saucer-shaped Internet cruiser add-on for TV sets. On June 22, Acer America will introduce for developing markets such as China a $500 machine that uses a TV display and features a removable drive from Iomega Corp. Tiny ViewCall based in Atlanta is planning a $300 settop box for September.

Two high-profile holdouts remain: Intel Corp. CEO Andrew S. Grove and Microsoft Corp. Chairman William H. Gates III both dismiss the network computer as too limited. But Grove concedes that he has a team working on prototypes just in case. And you can be sure that just as he spun around to embrace the Net itself, Microsoft's Gates will be pushing network PCs, too--if he sees that these machines will be winners in the information-appliance race.

By Robert D. Hof in San Mateo, Calif., with bureau reports


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Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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