
The rise of the information appliance
An array of new smart consumer devices discomfits the reign of the PC.
By Blaise Zerega
Red Herring magazine
From the October 1999 issue
The PC revolution is dead. Unable to match the ease of use and portability of information appliances marketed to consumers, the big beige box is succumbing as a consumer device to technological Darwinism.



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Soon the number of consumer devices sold will overtake the number of PCs in use. According to IDC, an IT consultancy, 18.5 million units of information appliances will ship in the United States in 2001; only 15.7 million home PCs will ship in that same year. Although the new consumer devices will steal some market share from the PC, they are really additions to the digital universe: their real potential will lie in increasing the number of networked, electronic devices in the home and in getting people to think of computers as everyday gadgets.
Like the shark, the traditional PC has reached its final form factor: barring a few color changes to its chassis, it will not evolve much more. The PC is still fairly well designed for office work, but its limitations are quickly exposed when it is considered as a hardware device that one might use to do simple things like play video games, make phone calls, manage contacts, schedule appointments, and listen to email messages or driving directions. Of course, doing these things on a traditional desktop PC while reclining on a sofa, waiting in line at a grocery store, or driving home from work is virtually impossible.
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The PC is giving way to a new breed of consumer devices.
Four companies that will shape the new era.
What makes an information appliance a success?
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The offshoots of PC technology are generating products that take evolutionary leaps forward rather than merely improving on the original. In this briefing, we present a series of articles that demonstrate how the PC's domain is threatened and argue that we are entering a post-PC world. Sped by the convergence of Internet, television, and wireless technologies, the computing landscape -- especially for home-oriented tasks -- will no longer be dominated by the PC. New consumer electronics are being offered, and existing products enhanced, to serve as central interface points to both the Internet and the nascent realm of home networks.
A starting point is the centerpiece of many living rooms, the television. By equipping video game consoles with built-in modems, processors, and memory chips, manufacturers like Nintendo (OTC: NTDOY), Sega (OTC: SEGNY), and Sony (NYSE: SNE) are creating devices that look like a toy but have the power of a PC (see "Playing the PC Game"). Another approach to PC-like television is the set-top box. It's an intriguing idea that is only just beginning to entice viewers (see "Sell a Vision").
Another threat to the personal computer comes from so-called free PCs -- low-cost systems bundled with long-term Internet service contracts. Their popularity is so upsetting the dominance of heavyweight PC manufacturers that Dell Computer (Nasdaq: DELL) is now turning the tables on these upstarts by bundling free Internet services with the purchase of its machines (see "Boxed In").
But perhaps the greatest threat to PCs comes from wireless "smart" phones, which feature Web browsing, email, and instant messaging capabilities. Some resemble tiny notebook computers with standard keypads on their top covers; some even come with small QWERTY keyboards (see "Mobile Forces").
But despite all their features, these devices depend on a service-based business model, where profits come not from the hardware itself but rather from service contracts. Thus we must mention the conspicuous absence of innovative content and services for the new consumer devices beyond Web browsing and email. The popularity of free PCs and free cell phones suggests that the service model will soon take hold with other devices too, reducing the sleek gadgets to cheap commodities.
The larger impact of these devices is that we will no longer limit our home computing to standard PCs, nor will we think of computing devices as mere productivity tools.



Nintendo
Sega
Sony
Dell Computer



"Can you have your ultraportable notebook and type on it, too?" from InfoWorld
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