Will 'Thin Clients' Replace Office PCs?

As we head into the fourth decade of the personal-computer revolution, there's a growing class of technophiles who rarely hunker down in front of a PC. Millions of Internet-savvy users now manage a lot of their multimedia hobbies, social networking, and even business tasks on smartphones from Apple (AAPL), Samsung, and other companies.

For a long time, consumers were driving this trend, but corporations are now starting to think about trading PCs for smartphones or other kinds of hybrid wireless devices known as thin clients. These look like notebook computers, but some are designed to connect with a smartphone and share its operating system and software applications. As a result, the thin client doesn't require its own internal processing or storage capability.

Companies are attracted to this approach for two reasons: Thin clients are cheaper to purchase than full-service laptops, and the corporate buyer can exert much stricter control over the software they run. Unlike laptops, both smartphones and thin clients can be tightly controlled by companies, so they don't get cluttered up with thousands of programs and media files downloaded from the Net. That makes them less vulnerable to viruses, hackers, and other security threats—saving companies money on tech support.

For the past few weeks, I've been looking at one of the first entries in a new class of mobile thin clients. Celio's Redfly C8N has an 8-inch screen and is designed to pair wirelessly with a smartphone running the Windows Mobile operating system. That means you can use the C8N to work on Word and Excel documents, e-mail colleagues using Microsoft (MSFT) Exchange Server, and do most other things you do at the office. Measuring 6 in. by 9 in. and 1 in. thick, the device is too big to cram in a pocket—unlike an iPhone or most other handsets—but I found it a lot more comfortable for business uses.

The Redfly is lighter than most netbooks, and at $299 it is far cheaper than ultrathin laptops. When the Bluetooth connection is on, the battery lasts about nine hours, nearly double what you get on most energy-efficient laptops. And if you need data or programs that are only on your office network or your desktop, there's remote-access software that will let you log in safely.

All of this makes Redfly very appealing, but there are some trade-offs: not least, an extremely cramped keyboard. During my tests, my typing accuracy rate dropped below 50% as I surfed the Web and took notes using Microsoft Word. Asus, Acer, and other netbook makers offered similarly tiny keyboards in early products, and shoppers returned them in droves.

Then there's the fact that Redfly is all work and no play. Because it relies on the limited processing power of the smartphone it's paired with, videos from YouTube (GOOG) and other sites quickly grind to a halt. That may actually be a selling point for some companies seeking to improve productivity, but it's likely to annoy some end users.

Other business issues could slow the adoption of thin clients in general. Many companies developing these types of computers naively believe their big corporate customers will buy all their computers from a single vendor. Yet Celio, for instance, doesn't support smartphones from Palm (PALM) and several other companies with strong positions in the corporate market. And while the security pitch on thin clients continues to be a big plus, Intel (INTC), VMware (VMW), and others are finding ways to improve safety on regular PCs.

The case for mobile thin clients assumes users will be able to get reliable Net connections wherever they go. That may be the reality in Japan or South Korea, but U.S. wireless networks are woefully spotty. One other factor to keep in mind: Netbooks and thin-and-light notebooks keep getting better, and in coming months, some will have price tags that are hard for companies to resist.

Celio is exploring some other interesting uses of its technology. In March it began previewing the Redfly Mobile Viewer, software consumers and businesses can install on Windows PCs running XP or newer operating systems. The software increases the phone's screen resolution and displays it in a window on your PC. This way you can run all your smartphone apps using a big screen and keyboard. (You connect via a cable, not Bluetooth.)

Neither of these two approaches is a sure winner. But with three times as many mobile phones in use around the world as PCs, it's a sure bet "personal computing" will have less and less to do with PCs as we once knew them.

Business Exchange: Read, save, and add content on BW's new Web 2.0 topic networkIs "Thinner" Better?Big trends such as cloud computing and the move to "thin client" PCs suggest that computing brain power belongs on networks of powerful servers, not on individual devices. If you need an application, you run it right on the Web site, à la Facebook. But does that really make sense? In a July 21 CNET News story titled "Moore's Law vs. the Cloud," IT industry veteran Gordon Haff points out that Gordon Moore's precept of semiconductor evolution states that cramming more processing and storage onto every device will get easier and easier--and maybe that's the right way to go.To read this and other stories, go to http://bx.businessweek.com/laptop-computers/reference/

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