Reading Tea Leaves of Technology: The Future Lies in Niche Markets

Declaring that your goal in launching a new computer company is to produce “the Amiga of the 1990s,” as former Apple executive Jean-Louis Gassee recently did, takes a certain amount of nerve.

The Amiga personal computer, after all, was one of the great missed opportunities of the digital revolution, a machine that was way ahead of its time but failed to gain a following beyond a small, if fanatical, cadre of game designers and video editors. It seems almost un-American to aim so low, to declare at the outset that your product is not for everyone.

But Gassee’s unusual approach, whether it succeeds or not, points to an important truth about the way in which new digital technologies are likely to evolve. For even if the economic barriers that keep many people out of the information revolution are disregarded, the truth is that the vast majority of innovations appearing today will never be mass-market technologies on the order of the television or the telephone.

Some people like to chat with strangers over the Internet, and some don’t. Some people like to play video games, and some don’t. Some people like to--or need to--access information via a computer, and some don’t. A plethora of new technologies means a plethora of choices, and there will always be people who would rather curl up with a book than try to get to the next level of Doom. The beauty of the digital age is that you can choose your degree of geekdom--and thus most new technologies are destined to coexist with the old.

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This might seem obvious, but it is not in the nature--or often in the interest--of go-go technology entrepreneurs to acknowledge limits. Video game makers have thus been on an endless quest to develop games for girls and games for grown-ups and games for just about anyone who isn’t a male under age 25. This effort has been almost completely futile, but no one is yet willing to admit that video games may have found their natural audience.

The personal computer industry could soon suffer the consequences of not learning the same lesson. After four years of frenetic growth, the consumer PC market in this country is probably nearing saturation. Computer makers reject this notion, pointing out the large number of households that could afford a PC but don’t yet own one, and most forecasts predict only a mild slackening in the growth of home PCs.

But maybe those who haven’t bought a PC yet are not waiting for a better product or cheaper product or a product they can buy more conveniently at a friendlier store. Maybe they just don’t want the PC as we know it. Even today, in households without kids or home offices, PCs are mostly used as expensive word processors and checkbook ledgers, perhaps with a little Net surfing thrown in during the past six months; the real question is not why more consumers haven’t bought PCs, but why so many have.

The answer, in part, is that people don’t want to be left behind. If the perception is that everyone will soon have a PC, then why wait? It’s in the interest of the PC industry to feed this perception, of course, but believing your own propaganda can be a dangerous thing: Many consumer PC vendors are already piling up losses, and there are probably more to come.

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Nowhere is the mythology of the mass market as misleading as it is on the subject of the Internet. A study released earlier this week said 11% of the nation’s adult population uses the Internet--an amazingly high number when you consider that only a year or two ago it would have been surprising if 11% of the population had even heard of the Internet. On TV, in the newspapers, in the movies, the Internet is portrayed as an exciting new world in which everyone will soon have a place.

Now don’t get me wrong: The Internet is big and important and will eventually change the world in many ways. Electronic mail in particular is a rare and revolutionary thing, a genuinely new form of communication. And the Net does make possible new forms of community and many interesting and highly efficient forms of information distribution.

Yet most of what one can see or do on the Net today is interesting only to relatively small segments of even the computer-using population. On-line chat groups, which more than anything else have driven the phenomenal growth of America Online, are clearly titillating to many, but hardly seem likely to challenge network television as a form of mass entertainment. Newsgroups, where you can share your views on almost any topic, are likewise a matter of taste.

Undoubtedly some people will eventually do a lot of shopping on-line, but no one I know is likely to be among them. The greatest databases and customized on-line news services in the world will not put traditional newspapers out of business. It may render them smaller and less profitable, but newsprint and the Internet will certainly coexist. The car killed off the horse-and-buggy in less than a generation and the telephone did the same to the telegraph. While the microprocessor is without a doubt at least as important historically, the changes it has wrought are of a different nature.

And that brings us back to Gassee and his company, Be Inc. He’s happy to let his new computer--which features a pair of powerful microprocessors, lots of video and audio ports and its own software operating system--be what it is, a specialty item for programmers and technically inclined musicians, video jocks and multimedia producers.

The conventional wisdom says that’s not a workable business model, since volume is required to sustain technology development. (Some, in fact, blame Gassee for Apple’s unwillingness in the late 1980s to cut its prices and pursue a mass market.)

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But we should hope Gassee is right, for his idea in the end is a liberating one. He talks of “federating the geeks,” creating a community of enthusiasts who support the machine and write programs for it and make it into something interesting. Thus the geeks get what makes them happy: a really cool new computer and lots of tools to play with. And the rest of us get what we want too: freedom from the need to be part of the geek federation.

For what information technology really provides, in the end, is choices and possibilities. So next time you hear that “everyone” is doing something, think hard about whether it’s something you really want to be doing.

Jonathan Weber is technology editor for The Times’ business section. He can be reached by electronic mail at Jonathan.Weber@latimes.com