At Comdex, Gizmos Take Center Stage From PCs
Your stereo is chatting with your computer, while MP3 music files are being piped through the SurroundSound speakers in the living room. Every TV in every room is connected to the Internet, as well as the family’s various cell phones.
The day’s to-do list is beeping from a flat-panel screen attached to the refrigerator. And at the end of the day, the kids’ Palm units picks up your not-so-polite request to come inside for dinner, and includes a map of the fastest route home.
This could be be your life. And at the computer industry’s biggest trade exhibition of the year, it’s clearly a life on which the PC world is placing a heavy bet.
Comdex, a subsidiary of Los Angeles-based Key3Media Group Inc., has always been a weeklong bacchanal over techno-toys, where the latest and greatest humming boxes are spotlighted with glee. But beneath the breathless hype is a foreboding sense that the world has reached a saturation point for what has always been the star of Comdex: the personal computer.
After nearly 20 years of development, the typical PC now is far more powerful than what the average consumer--or even business user--needs, say analysts. Companies are taking longer to replace their PCs, and so are families, where computers have already been picked up by 45% of households in North America.
In fact, the spotlight is now so far removed from the PC that many of the industry’s biggest players aren’t exhibiting in the convention.
Dell Computer Corp., for example, rented a 7,000-square-foot house near the Las Vegas Convention Center, where it tricked out the ‘70s-themed abode in pink, fuzzy furniture and digitally connected devices.
Among the hottest toys is its $249 digital music receiver, which links a home PC with a traditional stereo system. By using a house’s existing telephone wiring, the receiver can pull digital music files from a hard drive or stream radio stations off the Internet and pipe them through stereo speakers.
To show how easy these devices are to use, Dell Chairman Michael Dell had his mother stationed at the house, greeting guests and chatting about the innovations.
“Right now, it’s all about delivering products that make sense to consumers,” said Greg Nakagawa, director of the Internet line of business for Dell.
Whether this new category of devices, loosely known as “Internet appliances,” becomes popular remains to be seen.
But at least the products finally are available. Last year’s hot buzz at Comdex was about a future where the desktop PC would be broken down into small, specialized devices scattered throughout the home.
This year, the excitement was finally seeing these long-promised products in real silicon.
3Com showed off its Audrey, a slick $499 digital pad created for--where else?--the kitchen and is able to synchronize data with a Palm hand-held computer. Compaq Computer Corp. highlighted its iPaq Home Internet Appliance, a small $499 device that is built around the Microsoft Network. And then there was the Touch Pad, a joint venture between America Online and Gateway set at $599 and slated to ship by the middle of next year.
But analysts are warning that gadgetry alone won’t guarantee strong sales because many people who do not use the Internet are likely to stay away altogether.
A recent study by the Pew Internet and American Life Project found that 57% of those who now have no Net access have no plans to go online in the future. Nearly one-third, or 31 million Americans, say they “definitely will not” get Internet access, according to the study.
Even in the best-case scenario, revenues from the appliance market are only going to reach about 20% of the PC market, agreed Nakagawa.
“The new devices could bring new Internet usage models, and we could see some incremental PC sales growth from that,” Nakagawa said. “Still, I really think that it comes down to building devices that don’t duplicate what people have already spent money on.”
One of the hottest markets, say analysts, is distributing digital entertainment. Consumers are scrambling to get their home PCs connected to high-speed broadband service, a trend that is driven in part by file-swapping technologies like Napster and Gnutella that allow people to create music and video collections on their home PC.
Like Dell, Gateway will begin shipping next month a digital music player that also uses a phone line to connect to a PC.
Broadcom Corp. showed off an Internet-on-a-chip device that allows consumers to route digital video to any TV or PC in the home using existing phone wires. The Irvine-based communications-chip developer is working with America Online and computer maker Gateway, among others, to build a family of data devices for the home.
Heavy competition in this arena, however, could come from start-up firms like SimpleDevices Inc., based in Mountain View, Calif. At Comdex, the company showed off its SimpleFi, a wireless device that routes online radio and digital music from a PC into a home stereo system. The $149 device, slated to roll out by next fall, works as long as the PC and stereo are within 150 feet of each other.
SimpleDevices also had a wireless Internet alarm clock that streams Web-based content, such as music and news reports.
“People already have a PC. They’re not going to get rid of it,” said SimpleDevices Chief Executive Lou Hughes. “It only makes sense for us to build things that leverage off what people already own.”
In a field where engineers rule, practicality can still take a back seat to Jetsons-like gloss. Sony, for example, featured a prototype of a sleek orange and silver cell phone that looked as if it belonged on the set of the science fiction film “The Matrix.” Not only can consumers make calls, they also can use it as a digital music player, videoconferencing device, e-mail and electronic remote control.
Of course, over-the-top technologies are something that most computer makers are trying to avoid this year. Just ask IBM.
A couple of years ago, the PC giant rolled out a home-network service that let users do everything from change their Jacuzzi’s temperature with a cell phone to set up their refrigerators to send out an alarm when groceries were low.
Consumer reaction was lukewarm at best, say officials.
This year, IBM is spending most of its time focusing on wireless applications for home and work. Its biggest push is the new line of ThinkPad notebooks, which have built-in antennas and can communicate with other wireless devices. “Stay focused and stay smart, that’s the key,” said Jeff Thermond, head of Broadcom’s home-networking unit. “Even if you can do any pie-in-the-sky [stuff] technically, you’d have to spend billions of dollars to re-educate America on how to water the lawn,” Thermond said. “The lawn waters itself just fine as it is.”
