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