Special Report -- THE INFORMATION APPLIANCE
THE RACE IS ON TO SIMPLIFY
Pulling the unwired masses into the Information Age means gadgets must be as easy to use as the telephone
The great information-appliance race is on. The goal: to create electronic gadgets that are as simple as the TV but can instantly make the connection to the digital world. At giant corporations and in garages around the globe, the brightest minds in software, hardware, industrial design, linguistics, and cognitive science are working on devices that will make it possible to move vast amounts of information and make it all as easy as punching a button on a microwave or pulling a credit card from your wallet. Armies of engineers are busy developing radically new products--from wristwatch data phones to slimmed-down personal computers for cruising the Internet.
All of these intense efforts are aimed at bringing the unwired masses into the Information Age with appliances that in the 21st century will be as common as the telephone. Today's information appliance, the personal computer, has brought some 20 million people into cyberspace--through the Internet and commercial online services. But the PC--in its present form, at least--is an unlikely vehicle to bring a mass market online. Because of high cost and complexity, PCs still appeal mainly to a relatively young, relatively well-educated, and upscale segment of the population. It comes down to this, says Lawrence J. Ellison, president and chairman of Oracle Corp.: "The world is in need of computers that are easier to use and less expensive."
Ellison is just one of the would-be visionaries predicting what such computers will be. His company's concept for an information appliance, the network computer, is a PC that has been stripped down to the bare essentials needed for cruising the Web (page 76). There are dozens of other ideas, too. All are aimed at persuading the people who haven't been tempted to buy a home PC--that's 60% of U.S. consumers and 90% of households around the world--to take the cyberplunge.
Never mind that at this point nobody knows what "content" will induce these millions to switch from channel surfing to Web surfing. The opportunity is so vast that, from Silicon Valley to the consumer-electronics empires of Asia, companies are committing hundreds of millions of dollars to designing information appliances. In just the next three years, the market will explode, predicts International Data Corp. By the year 2000, some 22% of all Internet-access devices--about 22 million units--will be machines other than PCs, IDC figures. To put that in perspective, consider that it took the world PC industry a decade to reach that level of shipments.
CEREAL-BOX PRIZES? What is the ideal information appliance? It will come in many flavors. Some will be simple variations on what we have today: home computers reborn as slimmed-down Net cruisers, Web-surfing TVs, smart phones, Net-connected game players. Some will be wildly futuristic. Tim Berners-Lee, creator of the World Wide Web, says it might even come inside a cereal box. "My kids could rummage around for the free gift, take out a tube, unroll it to something flat, flexible, and magnetic, stick it to the refrigerator, and start navigating the Web. From the Kellogg's home site to the wild blue yonder," he says. The point is that these appliances will be everywhere. "You don't treat it as something special," says Berners-Lee, now at Massachusetts Institute of Technology, where he is director of an industry consortium setting standards for the Web.
What makes the moment ripe for the information appliance, of course, is the Internet and its easy-to-use World Wide Web. Without setting out to do so, the creators of Web-browsing software such as Netscape Communications Corp.'s Navigator have produced the biggest breakthrough in "user interface" in years. Point to an onscreen button or highlighted word, click your mouse, and the Net instantly links you to the information you're after--a weather map, stock quotes, your E-mail. "The whole `hotlinking' way of accessing information has the user simplicity of using a TV," says Intel Corp. CEO Andrew S. Grove.
And because Web-browsing software is not restricted to personal computers, it is possible to create all sorts of new devices to cruise the Net. Ellison, for example, sees the opportunity to offer a dedicated Net cruiser that will be a sharp contrast to a conventional PC. Personal computers have come a long way, he says, but they remain expensive, crash-prone, and sometimes maddeningly complex. Even with the new Windows 95, you can be confronted with a frozen screen displaying a baffling "error message" such as "This program has performed an illegal operation and has been shut down."
That's certainly not the kind of treatment consumers expect from their appliances. And that's one reason PCs are unlikely ever to achieve the ubiquity of TVs and phones, which are found in 94% of U.S. homes. Indeed, the idea that the PC will make it into as many homes as the phone is "laughable," says Ellison.
Not that Ellison's network computer stands a chance of replacing the PC anytime soon. Even Sun Microsystems Inc. CEO Scott G. McNealy, a member of the group endorsing the network-computer standard and an outspoken critic of "Wintel" PCs based on Intel and Microsoft Corp. technology, acknowledges that. The opportunity, he says, is to nip around the edges of the massive PC market. "We can make a lot of money on just a fraction of the PC market," he says.
The PC will survive because it not only has huge momentum--the market is approaching 70 million units annually--but it already has proved to be supremely adaptable. After all, in little more than a decade, it has evolved from a clunky box that displayed green numbers and text to a multimedia marvel, capable of playing back video, audio clips, and every other form of digital data that now comes across the Net. "The PC is the TV for the Internet," says Duncan Davidson, a consultant with Gemini McKenna High Tech Strategies. Adds Greg E. Blonder, director of customer-expectations research at AT&T Labs: "Four years from now, five years from now, the PC will still be the information appliance."
MUTATIONS. As in any classic evolutionary scenario, the PC is adapting because of rising competition from other species. In addition to the new Net cruisers, there are mutations of consumer-electronics gear that will challenge PCs in the information-appliance market. Japanese consumer-electronics giants such as Sony Corp. and Matsushita Electrical Industrial Co., never major players in PCs, are gearing up to offer consumers a variety of easy-to-use appliances including Web-browsing videogames and digital TVs that double as Internet cruisers (page 96).
The consumer-electronics titans have important advantages over the PC makers as the race for the information appliance begins. They have brand names that are welcome in the living room and, more important, they have always had to focus intensely on how consumers experience their products. That's an approach that PC makers are just beginning to appreciate. "We don't need more breakthroughs in software or technology," says Stan Shih, chairman of Acer Inc. "We need breakthroughs in business philosophy." Acer, Taiwan's electronics giant, says it's ready to start moving from computers into consumer electronics. Later this year, it plans to introduce a $500 Internet PC to be sold first in emerging markets such as China.
Shih is not the only PC mogul to recognize the need for a new approach. In April, Microsoft Chairman William H. Gates III rolled out an initiative called Simply Interactive PC. It is a standard for a more consumer-oriented Wintel computer that includes a format for linking those PCs to a variety of consumer-electronics gear. "We still have a long ways to go to make the PC an appliance," says Gates. How long? Gates says pollsters at MIT recently asked people what invention they couldn't live without. The winner, at 63%, was the automobile. Only 8% cited the PC, which tied with the blow-dryer and came in just below the microwave oven.
PC makers are now scurrying to make sure they have the consumer-oriented designs to fit into the information-appliance category. IBM plans to woo consumers with sleek new PCs, user-friendly software, and services including a new IBM Web site in which customers can get help and the latest software upgrades. Compaq Computer Corp., meanwhile, has joined forces with Thomson Consumer Electronics to merge PC features with home-entertainment systems. The PC giant also has a deal with Mattel's Fisher-Price unit to develop a line of PC add-ons and software for toddlers.
"UNFINISHED BUSINESS." Apple Computer Inc., which once boasted that its Macintoshes would be the machines "for the rest of us," is making a major effort to reorient itself for the information-appliance race. CEO Gilbert Amelio, who is building Apple's turnaround strategy around the Internet, recently created a new Information Appliance Div. Already, Apple--with its Japanese partner, Bandai Co.--has brought out a stripped-down Mac called the Pippin. It attaches to a TV and can be used to play CD-ROM games or cruise the Web. Meanwhile, the Newton MessagePad personal digital assistant is being upgraded to become a wireless Web cruiser. "Making `computers for the rest of us' is as yet unfinished business," says Amelio.
It may be that neither PC makers nor consumer-electronics giants will lead in information appliances. The new market presents a great opportunity for new companies. Indeed, some of the first information appliances to hit the market will be those designed by Diba Inc., a startup in Belmont, Calif. Formed by Farzad Dibachi, who was head of Oracle's new-media group, Diba has ideas for some 30 devices--each one a single-purpose machine such as Diba Mail, a phone and E-mail combo. The idea, says Dibachi: "To get your grandmother in the Midwest to access information."
Whatever form the information appliance takes, it is software that will make it fly--or flop. Even though Web browsers have succeeded in hiding the complexity of computers and made scanning the globe-spanning Internet relatively easy, improvements in software are still needed. For one thing, it's far too easy to get sidetracked or overwhelmed on the Net. Punch a few words into a search engine and get 26,983 possible matches: Then, you begin to appreciate the need for better software technology.
Help is on the way (page 83). At software-development labs everywhere, programmers are working on "agent" programs that carry out routine tasks for you. These little drones, which can be deployed to perform such jobs as scanning the Web for the latest news on a particular company or product, offer the best hope for making the Web easy enough for anyone. Ted Selker, an IBM research fellow and the inventor of the rubbery cursor control on ThinkPad notebook computers, has developed an agent called Personal Web Manager. When you want to venture out on the Web, it runs out ahead and tests traffic conditions on the I-Way routes to your favorite Web sites. The results are displayed in traffic-light red, yellow, or green.
Sounds simple--and perhaps trivial. But it is precisely this people-friendly approach that is needed. Before the world's consumers rush to the Net, they'll need to know that using an information appliance is as easy as toasting a bagel.By Ira Sager in New York, with Robert D. Hof in San Mateo, Calif., Paul Judge in Boston, and bureau reportsReturn to top