News: Analysis & Commentary: STARTUPS
IS IT TIME FOR THE `INFO APPLIANCE'?
Tiny Diba is gambling on cheap, single-purpose computers
Each year, the personal computer gets more and more pumped up with power and features--they'll sort your messages, jazz up your presentations, play CDs, design a minivan, surf the Internet. The only thing the machines can't do, it seems, is make coffee. So what's next? A new class of computers that stand the can-do-all notion on its head--and are as easy to use as a coffeemaker.
On Apr. 29, Farzad Dibachi, an Oracle Corp. senior vice-president who quit the hard-charging software company to found his own Silicon Valley startup, Diba Inc., will show his first products. His lineup: "information appliances"--that are startling in their simplicity. The machines require no tapping of computer codes, no loading of applications, no naming of computer files. All functions have been built into simple push buttons on the casing, much like an ordinary microwave oven. What's more, Diba says the machines can be manufactured for as little as $150 to $300.
KITCHEN HELPER. How is that possible? Instead of PCs that can do everything, Diba appliances are designed for one job. Diba Mail, for example, is a compact phone, E-mail, and fax combo not much bigger than an answering machine. Diba Internet is a slim device that attaches to the TV for cruising cyberspace. Then there's Diba Kitchen, which fits underneath the cabinet and stores recipes on CD. "It's a compelling idea," says John Rymer, vice-president at market researcher Giga Information Group. "If they can do everything they say they can, they could rake in the dough."
Coming up with a popular, cheap computer that's no more complex than a blender has long been the computer industry's Holy Grail. But digital books, electronic Rolodexes, kitchen PCs, personal digital assistants, and handheld stock-quote devices have never caught fire. The reason: It's not easy to design a single-task machine so useful that a buyer will plunk down $500 to own it.
Dibachi says he can beat the conventional wisdom by selling a whole family of products for much less. In the works are some 30 "info appliances," everything from Yellow Pages to patient-info machines. That means Diba isn't dependent on a single, million-unit hit. And Dibachi figures that technology has become so pervasive that buyers will readily see the need for machines that can E-mail, browse the Web, or provide quick electronic access to everything from airline reservations to stock trades. Says Tom Maresca, a new-media analyst at Jupiter Communications Co.: "The Information Age has taken root in people's lives. This may be the time."
Diba's plan: license its software and provide hardware designs to deep-pocketed companies that will make and sell the devices. Dibachi is tight-lipped about any partner, but he says deals are imminent that could put its products on the market by fall. Sources say Diba is in talks with NEC, Zenith, Samsung, Pacific Bell, and Lucky Goldstar. Cable & Wireless PLC, the telecom giant, is nearly sold. Executives there say they are keen on Diba's Mail and Internet appliances that are cheap enough to be given to customers, who would then pay a monthly service charge.
"OFF THE MARK." Dibachi's former employer is hot in pursuit with a similar strategy. Indeed, the 32-year-old entrepreneur left Oracle after helping CEO Lawrence J. Ellison hatch the idea of a low-cost Internet appliance, now billed as the $500 Network Computer. To get that project off the ground, Dibachi hired his brother, Farid, to design a prototype.
That was nearly a year ago: Farid Dibachi is a Diba co-founder. In the meantime, according to Farzad, Oracle's Network Computer has taken a far different, more costly approach. "Larry [Ellison] is totally off the mark. He's hanging everything on the PC," says Dibachi. Oracle, which is scheduled to announce on May 20 which companies will license its design, declined to comment on Diba.
Diba is betting the future on hopes that the era of info appliances has arrived. If it has, says Dibachi, Diba will be a $1 billion company. If not? "It's in our nature to go all out," he says. "We're comfortable with either really making it or really not making it." Given the fail rate of Silicon Valley's big dreamers, such nonchalance might be wise.By Kathy Rebello in Belmont, Calif. with Steve Brull in Tokyo