Sometimes, Less Is Less

These Net appliances achieve simplicity but sacrifice too much in function

I have a message for companies that hope to offset stagnant PC demand by selling Internet appliances: Simple is not simpleminded.

Net appliances have become a critical business proposition. Just over half of U.S. households own PCs, but that number has stopped growing. What's more, people don't seem to be replacing their old computers as quickly. I'm convinced that simplified devices that are just browsers and e-mail terminals could rekindle people's interest. But if you are going to do only one thing, you had better do it really well. And all the efforts I've seen fall short: They achieve simplicity, but at too high a cost in function.

The latest efforts show promise but still miss the mark. The Gateway Connected Touch Pad is the first device based on new Instant AOL software from America Online and its Netscape unit. And a new version of the Compaq iPAQ Home Internet Appliance replaces the Microsoft software of the original (BW--Sept. 11) with packages from Be Inc. and Norway's Opera Software.

SOFTWARE SHORTFALL. Both are decent, and similar, hardware designs with software that falls short. Both feature pivoting 10-inch flat-panel displays and wireless keyboards. For some reason, designers seem to think buyers of Web appliances incapable of using a standard mouse. Instead, you control the cursor with spongy rubber knobs. I found them hard to use accurately. Fortunately, you can plug a standard mouse into a universal serial bus port. The Gateway's touch screen provides another alternative.

The downer on the Gateway is the Instant AOL software, which is more like AOL Lite. When you wake the unit up, it gives you an AOL log-in screen. Enter your password, and it dials up the service (a network option that allows use of a high-speed connection was not available on my test unit). You quickly get a display that looks like a shrunken version of the standard AOL welcome screen. Unfortunately, the top inch of the smallish screen is devoted to a familiar AOL toolbar whose functions duplicate a row of dedicated buttons on the keyboard.

Both the browser and the mail program are underfeatured. You can listen to RealAudio, but streaming video is billed as "coming soon." Macromedia Flash animations don't work, and you can't view Adobe Acrobat documents. Some complex pages failed to display properly, with pictures superimposed on text. The mail program is similarly handicapped: The only attachments that can be opened are standard still-picture formats such as JPEG. And unlike PC-based AOL mail, you can read messages only while online. For the $599 cost, you can buy a cheap PC, set it up to boot straight into AOL service, and get more for your money. Either way, you'll pay $4.95 to $21.95 a month to AOL.

The iPAQ's software is harder to judge. Compaq will sell it only through service providers or other e-businesses, such as online brokers, and each partner will do its own software configuration. The Opera browser is more capable than AOL's, handling Flash, Java, and RealVideo, although the audio quality is bad.

The sample unit I had was configured to use Web mail from Yahoo!, a poor choice that requires you to battle past a screenful of ads to see your messages. But no mail program can display attachments such as Word or Acrobat files because these require software on the computer separate from any mail program.

Pricing for the iPAQ will be determined by the companies that distribute it. But the cost of the MSN Companion version, $99 to $499 depending on the length of a commitment to MSN service, should be a good indication.

I still believe in Net appliances, both as adjuncts and alternatives to home PCs. But the designers of these devices are straining my faith. Buyers of appliances, no less than buyers of PCs, need browsers that deliver the full richness of the Web, adequate e-mail, and pointing devices that work. Fortunately, the software shortcomings can be fixed by automated downloads. Let's hope the improvements are ready soon.

Before it's here, it's on the Bloomberg Terminal.