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Here Come the "Information Appliances"

Written By: R. Krause
Published On: November 17 1999

Event Summary

PALO ALTO, Calif. -(Dow Jones)- The most eagerly anticipated products showcased this week at Comdex, the largest computer-industry trade show, are expected to be digital devices intended to simplify access to the Internet.

With the rush of these so-called "information appliances" into stores next year, these products may represent a significant challenge to desktop personal computers.

Analysts expect the appliances to fall into several distinct categories: e-mail terminals that can look like small typewriters; screen phones that also send e-mail; and Web terminals, or dedicated non-Windows computing devices for browsing the Internet.

Market Impact

As with server appliances, the growth of information appliances (sometimes called Internet appliances or PC appliances) will be tremendous over the next three years; we expect annual growth rates will be greater than 100%. This market will prey on the traditional PC/desktop market, eating directly into PC volumes. This is a result of users trying to find a lower-cost alternative to the standard PC. In addition to lower pricing, information appliances are being marketed as lower cost of maintenance, especially with respect to network/system administration.

As with any "new" market, there will be a period of diversification before the inevitable consolidation. We expect this consolidation will start in 12-18 months. In the meantime, most or all of the leading vendors (as well as smaller vendors and startups) will try to jump on the bandwagon.

User Recommendations

Users looking for a lower-cost PC alternative (without having to buy an eMachines et al. system), should take a close look at appliances. Corporate users who intend to make a major infrastructure change from PC to appliance should carefully review the advantages and disadvantages associated with reducing costs at the expense of user flexibility. By definition, most users with appliances will not have the "typical" set of applications resident on their machine, as corporate appliances are expected to be tied into the ASP/software "rental" model of business computing. Generally, so-called "power users" will see little if any benefit to having an appliance, and may lose effectiveness/productivity. However, casual users may find appliances a plus.

 
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