Analysis: It's raining Net appliances, but where?

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by Yardena Arar

(IDG) -- Some looked like small PCs, others more like Etch-a-Sketch tablets. Some were wired, others featured built-in wireless-networking hardware for untethered Internet access. Some were on display at booths on the show floor, others on view only in the quiet of an off-site hotel suite.

If the proliferation of prototypes at the recently wrapped Comdex is any harbinger of products to come, then the age of the Internet appliance is truly at hand.

But while everybody and their brother seemed to have a concept or technology demo for one or more sub-PC-size devices that people--primarily in the home--would use to browse the Web and manage e-mail, plans for commercial products were scarce. And while some vendors spoke of negotiations to have Internet service providers distribute these devices to customers, nobody thinks they're going to be widely sold at retail anytime soon.

"We're not going to be sending 50,000 of these to Circuit City," said Peter Weedfald, executive vice president of corporate communications and emerging business for monitor vendor ViewSonic, showing off a couple of devices at the ViewSonic booth.

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ViewSonic is seeking ISPs and other partners to distribute the devices, which can be customized to meet the partner's needs and which the company expects will cost consumers less than $500. (The company last summer announced a strategic alliance with AT&T WorldNet, but so far there's been no announcement of availability to consumers.) One device consisted of an LCD monitor with a very small box that runs the OS, which can be Windows CE, Be's Internet Appliance, Linux, or any other embedded system.

Another device, the Wireless ViewPad, fell into the tablet camp, with a 300-MHz National Semiconductor GX1 CPU, a 10.4-inch touch-screen LCD, a nine-cell rechargeable lithium ion battery, and a CompactFlash slot. The prototype also had a built-in Proxim RF wireless-networking module, so owners can use it on a Proxim Symphony network.

National Semiconductor and Metricom, meanwhile, unveiled basically the same device, but it features built-in hardware to access the Internet via Metricom's 128-kilobits-per-second Ricochet service. The device is expected to cost nearly $1000 at launch.

ViewSonic's display was one of the more ambitious on the show floor. But the coolest collection of devices was in Be's suite at the Venetian hotel. Made by an assortment of vendors--from high-profile companies such as Compaq and National Semiconductor to less familiar brand names such as FIC, ProView, and DT Research--the BeIA-based prototypes ranged from touch-screen tablets with built-in 802.11b wireless-ethernet antennas to more familiar PC-like form factors.

But even Be founder Jean-Louis Gassee, who stopped by the suite to chat briefly, thinks prices will have to come down and homes will have to become more networked for such devices to become both desirable and commercially viable. In his Comdex column on the Be Web site, Gassee says he understood a skeptic's observation that people wouldn't buy a device just for Web browsing. "Fair comment," Gassˇe writes. "We've seen how some pioneers have fared, from the IToaster to the I-Opener."

But, he continues, "interest in 'connected devices' (another name for Internet appliances) keeps gaining weight.... We're moving from the PC as the universal device to a more rational segmentation into task-specific devices...."

At the suite, Gassee said that the combination of broadband access and home networks will make appliances more attractive in locations where a full-blown PC isn't required or feasible.

BeIA is especially suitable for Internet appliances since it requires relatively little power and can support a wide range of popular Web formats, including Flash and MP3. Be's Internet appliance software initiative has recently been enhanced by the addition of server-side management software, so that the ISP or distributor can update the software on the client device or troubleshoot any problems without user intervention.

Internet appliances surfaced in all sorts of locations at the show. The Home RF Consortium's booth, for example, had a Cassiopeia Fiva pen tablet--a device currently sold exclusively in vertical markets, but expected to migrate to consumer outlets soon--outfitted with a wireless PC Card antenna. Oracle Chair and Chief Executive Larry Ellison, in his Comdex keynote, said Oracle and Compaq are collaborating on an Internet appliance that should be available by year's end.

The biggest collection of devices, however, was at an offsite press event dedicated to the category. The two dozen or so vendors at Information Appliance Press 2000 ranged from giants like America Online and Gateway, which showed their newly announced Internet appliance, to Aqcess Technologies, which showed its latest tablet, the QBE Vivo.

Intel was there with its Dot.Station, a Linux-based appliance announced at PC Expo back in June. Cidco showed new versions of its MailStation devices, including one that will add Web browsing capability to the existing e-mail service.

Notably missing in action was Netpliance, which days before the show said it would cease selling its $299 I-Opener appliance and instead license its design to larger companies such as AT&T. Several vendors said Netpliance had never been able to come up with a viable business plan for its product.

But neither the I-Opener's failure nor Virgin Entertainment's decision to abandon its VirginConnect WebPlayer program seemed to put a damper on the enthusiasm of the Internet appliance proselytizers. And given the sheer volume of Net appliance activity at Comdex, it seems inevitable that some will eventually catch on, especially if components such as LCD panels get cheap enough to make them affordable as second or third devices in the home.

Comdex wrap-up: Net appliances, wireless and widgets
November 17, 2000
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November 15, 2000
Ellison: Oracle to team with Compaq on Net device
November 14, 2000
Comdex focus is on Internet devices
November 13, 2000
Virgin withdraws Webplayer Internet appliance
November 13, 2000

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