Internet 'Viewers' Prepare To Do Battle in PC Market
Stripped-down computing device may lure those seeking a cheaper way to get on-line
PITTSBURGH — SO you want to surf the Internet, but buying a $2,000 computer to do it sounds too expensive. Not to worry. All you need is an Internet ''viewer.''
For $200 to $500, manufacturers are gearing up to sell a stripped-down computing appliance that will make it easy for consumers to get on-line.
The new device represents a huge challenge for the personal-computer (PC) industry. After years of reinventing itself to conquer one market after another, the PC may not be able to repeat the magic in the push to create a low-cost Internet-access device.
''What we're talking about here is the emergence of a new market,'' says Bruce Lupatkin, director of research at Hambrecht & Quist in San Francisco. Eventually, such technology could find its way into many products. ''In aggregate, I think they'll be bigger than the PC market.''
Analysts expect the battle could start as early as this year, when the first Internet viewers hit store shelves. But it will take longer for the new devices to establish themselves.
''In two or three years you'll get an Internet device,'' says Frank Gens, senior vice president at International Data Corporation in Framingham, Mass. ''On-line commerce is going to be such an important piece of the picture for the corporate world ... the banks, the insurance companies, the enterprising companies will be subsidizing this.''
Just as cellular-telephone companies today give away phones so they can sell the service, Mr. Gens predicts, Internet companies will give away Internet viewers so they can get consumers on-line.
Not everyone believes the Internet viewer will succeed. If computer companies sell a bare-bones viewer that costs $500, consumers may well spend the extra $300 to buy a low-end but full-fledged PC, they say. Several analysts agree that $500 is too high to attract the general consumer. But build it cheaper, PC mavens warn, and the viewer won't do very much.
It may not have to, counters Raymond Smith, chief executive of Bell Atlantic Corp.
''We're seeing a huge base of customers who don't need - who don't want to pay for - a computer in their homes,'' he says. All they want is to surf the Internet and send and receive electronic mail. He envisions a device ''aimed at the TV users, which means just about everyone.''
No one knows yet what the successful device will look like. For example, Internet viewers will have computer components but they'll have to sell for about the same price as an advanced video-game player.
So, like the game player, they may use a buyer's TV set as a screen, but they'll have to be far better at long-distance communication, like the set-top boxes that companies are building for interactive TV.
''There are enough manufacturers that think they have something to bring to bear on that issue that we will see a lot of experimentation,'' says Emily Green, senior analyst with Forrester Research Inc. in Cambridge, Mass.
Computer-software companies are building them. Oracle Systems Corporation, expects to start shipping its model in March. LSI Logic Corporation aims to make the microchip for the viewer. Even Japanese consumer-electronics companies have a shot at making such a device. Having missed the personal-computer revolution, these industry giants are eager to take advantage of the next wave of computing.
Another possibility: telephone manufacturers. ''I think the concept is a scaled-up phone,'' says Andrew Neff, senior managing partner at Bear Stearns Company.
The logical choice to build the device would be a computer company, such as Apple Computer or microchip giant Intel Corp.
But analysts are skeptical that the computer industry can create a low-cost, consumer-driven device, especially when the PC market continues to boom.
''One of the mistakes people make is to assume that this new device spells the death knell for the personal computer,'' Mr. Lupatkin says. But ''hardware access to the Internet is going to take lots of forms.''
Many people will get on-line with their home computers. Others will use Internet viewers, he adds. Still others will use traditional devices, such as cellular phones, which will be revamped to include small screens that can display users' Internet electronic mail.
For anyone who can build the right kind of device at the right price, the prospects for a new kind of PC look very bright indeed.