Information Appliances Worth a Plug for Predictions in ’99

It’s time to peer into my new 500-megahertz crystal ball to see what’s in store for 1999. I did that last year at this time, but due to some software glitches (it’s never my fault), the picture was a bit murky and not entirely accurate.

Last year’s 300-MHz crystal ball, for example, failed to predict that the value of Yahoo Inc. stock would increase nearly eightfold. And there wasn’t even a hint that a start-up online auction house called EBay Inc. would be worth $12 billion only a few months after going public. Fortunately, I write about products rather than stock picks.

In the column I wrote a year ago, I predicted that flat-panel LCD displays (such as those used on laptops) would begin to take hold on the desktop market. That was a pretty easy thing to guess, considering how cool they are, but they’re still far from ubiquitous.

Compaq Computer Corp. offers a 15-inch flat-panel display that costs about $450 more than a standard 17-inch-display cathode ray tube display. LCD monitors have come down to about $800, but that’s still a lot more expensive than a CRT. LCD panels will continue to fall in price and, by the end of next year, will be the monitor of choice for high-end PC buyers. Budget-conscious consumers, however, will have to wait at least another two to three years before LCDs start to show up on sub-$1,000 PCs.

3Com Corp. hit a home run in 1998 with its new Palm 3 device, essentially an upgrade to the popular Palm Pilot it introduced in 1996. Next year, 3Com will do even better if, as anticipated, it releases Palm VII. The device, expected to cost about $800, will provide wireless Web and e-mail connectivity as well as access to content provided by ABCNews.com, ESPN.com, E-Trade, the Wall Street Journal and other sources.

In the meantime, we’re starting to see some Palm clones, including Royal’s DaVinci Pro, for under $200, which offers scheduling, phone book, memo pad and to-do list as well as Internet connectivity, e-mail and Web surfing. A fold-up external keyboard lets you enter information by typing. Like the Palm, the DaVinci also allows you to transfer data to and from a PC and by pecking at the screen with a stylus.

These small devices are part of a larger category that International Data Corp. calls “connected information appliances.” The category, which also includes Internet phones, devices that let you access the Net from your TV and connected gaming machines, should do well next year. Shipments in 1999 “should be over 8 million units, compared to 3 million in 1998,” according to IDC analyst Kevin Hause.

The coolest technology will wind up in kids’ hands. Sega of America Inc.’s DreamCast game console, which is already available in Japan, is expected to reach our shores next fall. The device, which runs a customized version of Microsoft Corp.’s Windows CE operating system, incorporates a Hitachi RISC (reduced instruction set computing) processor and an NEC Corp. graphics system, and comes with a gigabyte of data storage and an optional modem. I’ll spare you the other technical details, but it looks like it’s going to be one powerful gaming machine.

Eventually, people will stop using standard phone lines to connect to the Net. For most, though, that won’t happen in 1999. I happen to be lucky enough to live in an area where I can get cable modem service for $49 a month that’s not only 10 times faster than a 56K modem but on all the time. In the meantime, some phone companies and other providers are offering digital subscriber line (DSL) service that operates at speeds ranging from 144 kilobits per second all the way up to 1.5 megabits per second, depending on what’s available and what you’re willing to pay. DirecPC from Hughes Network Systems provides 400-kbps access via satellite, and Metricom Inc. is expected to start offering a 128-kbps service via wireless modem next year.

All this will someday contribute to the death of POTS (plain old telephone service) as a means of connecting to the Internet, but so far only a tiny fraction of North America is wired for such services at anything that approaches consumer-level pricing.

Other devices that will get attention, though not necessarily many sales, in 1999 include electronic books such as those by Rocket, and car-based computer systems such as Clarion’s new AutoPC, which can dial your car phone, queue up your audio CD and give you directions to your destination.

In the meantime, the PC will remain alive and well. IDC expects PC shipments to exceed 12.5 million units in 1999, up 13% over 1998. That’s good news for Bill Gates, who shouldn’t have any trouble paying his lawyers or the mortgage on his $53-million house.

Larry Magid can be reached at larry.magid@latimes.com. His Web page is at https://www.larrysworld.com; on AOL, the keyword is “LarryMagid.”