‘Internet PCs’ Find Major Backers, but Intel and Microsoft Remain Unsold

The $500 personal computer for surfing the Internet moved another step closer toward reality on Monday, but it did so without the blessing of the PC industry’s two most influential companies: software powerhouse Microsoft Corp. and chip giant Intel Corp.

International Business Machines Corp., Apple Computer Inc., database software maker Oracle Corp., Internet software designer Netscape Communications Corp. and workstation manufacturer Sun Microsystems Inc. announced a technical specification for “Internet PCs” as well as a list of 70 computer, telecommunications and consumer electronics companies supporting the “standard.”

Separately, Oracle said it has established Network Computer Inc., a subsidiary to design Internet PCs and license those designs to hardware manufacturers.

The Internet PC, a version of today’s PC minus expensive components such as a disk drive and a video display monitor, has as many backers as it does detractors. Critics say computer users will want to store critical data on their own computers and that televisions do a poor job of displaying text.

Even some so-called supporters seem lukewarm.

“None of these machines exist yet,” said Mike Homer, marketing vice president for Netscape, which makes the most popular software for browsing the Internet. “For us, this opportunity is small when compared to the number of existing PC users who have yet to go online.”

Oracle Chairman Lawrence Ellison continued to be the most vocal champion of the Internet PC, saying it represents “the dawn of a new era” in the history of computing.

But the set of standards set forth by the group Monday are the technologies already widely adopted by Internet users and content developers. And few of the 70 companies that added their names to the list of supporters--among them NEC Corp., Hitachi Ltd. and Motorola Inc.--will actually make devices.

Some called the gathering a meeting of the “anti-Microsoft” consortium with the purpose of wresting power away from the PC software giant. And indeed, Microsoft and Intel were notably absent, although Ellison said he expects some versions of the Internet PC will use Intel microprocessors, the engine of about 80% of the PCs in existence.

Although conciliatory toward Intel, Ellison missed few opportunities to bash Microsoft. “I can’t speak for anyone else about whether they have [Microsoft Chairman] Bill Gates envy,” he said. “But for myself, I wish I had Bill Gates’ monopoly.

“But the way you beat Bill Gates is not by envying him, but by building better products,” he said.

Microsoft Vice President Craig Mundie said the company had been invited to attend the news conference, but declined.

“They’ve chosen . . . the least common denominator,” Mundie said. “It precludes the use of any of today’s existing software, and a lot of the rhetoric coming from Mr. Ellison seems to be that this thing is being offered in lieu of Microsoft technology.

“We’re not against a lighter-weight [PC],” he said. “But we want one that would have synergy with the granddaddy PC so that people’s existing technology investment is preserved.”

Intel spokesman Tom Waldrop said the company “continues to believe that a full-function PC is the best vehicle for searching the Internet, although we think it is very likely there will be some experimentation with network computers.

“If any of our customers want to build [an Internet PC], we think the Intel [microprocessor] is the best for doing that,” Waldrop said.

Among those committed to manufacturing Internet PCs are Italy’s Olivetti, Sun and IBM. Olivetti said it will begin shipping Internet PCs throughout Europe sometime before the end of the year.

Sources close to Sun said the firm in the fall will bundle Internet PCs with its servers--the large computers that orchestrate networks and act as “sites” on the Internet--although the company would only say it intends to manufacture the devices. Sun has been showing a prototype to potential customers for several months.

IBM said its Internet PC, which will also be available before the year’s end, will be targeted at its business customers. Vice President John Thompson said IBM will have a line of Internet PCs targeted at specific industries such as banking and airlines.

Apple said Pippin, its television set-top box that also plays compact discs, and its hand-held computer, Newton, are being outfitted with Internet access.

“Today’s personal computer is enormously complex and expensive,” Ellison said. “We want to see it simplified so not just 35% of homes have computers; it would be more like 90% of homes.

“But a list of supporters isn’t interesting unless there are actual products,” he said. “Now let’s see who can come up with the coolest machines.”