WebTV is part of an enterprising experiment. The consumer-electronics-and computer industries have teamed up to make a hybrid product they’ve dubbed the “information appliance.” If the demand meets the hype, it could mark the birth of something truly exciting: the Internet for the rest of us–the 65 percent of U.S. households that still don’t own PCs and don’t seem to want them.
The idea is simple enough. Instead of forcing millions of Americans to overcome PC-phobia or strain their budgets to get on the Internet, bring the Net to them, Trojan-horse style, in the form of an appliance they already know how to use: the phone, TV, videogame console or VCR. Companies that make the world’s consumer electron-its–Sony, Mitsubishi, Zenith, Samsung, Philips and Sega–will provide the appliance. Then it’s up to computer-software companies to figure out how to pump the information through it. In theory, surfing the Web, exchanging Internet e-mail or getting information off a CD-ROM suddenly becomes as easy as fileking on a blender.
The concept makes sense. PCs are ex-pensive-around $3,300 for a state-of-the-art Pentium machine. Even last year’s model will rtm you about $1,500. Hardware prices keep falling, but PCs are still hard to use compared with a phone or TV. David Nagel, the president of AT&T’s research-and-development lab in Basking Ridge, N.J., believes that people in the technology business are wrong ff they think the average consumer will spend the time it takes to become proficient on a computer. The In-ternet, on the other hand, doesn’t have to be hard to use. With the right interface, in fact, it can be almost effortless.
For people interested in single applications such as e-mail or financial planning, the information appliance may be the answer. Scott McNealy, CEO of Sun Micro-systems, one of the companies working on a so-called network computer (sidebar), says the information appliance will make computing ubiquitous. “Your phone will suddenly become a computer, and you won’t know it bemuse you won’t operate it like a computer,” he says. ‘“You'11 just hit the buttons and the computing will happen.”
That’s the idea behind these new products, which come in many shapes, sizes and prices. Diba Inc., a software start-up in Menlo Park, Calif., has worked with Zenith to create the NetVision, a $1,000 television that comes out of the box ready to browse the Web. NetVision will be in the stores before Christmas. Last week Sega introduced its Net Link, a $199 modem that plugs into the cartridge slot of the Saturn game machine, letting garners Web surf. Then there’s the telephone. It has “info appliance” written all over it. Phones with internal modems, screens and tiny keyboards from Philips, Uniden and US Order are just coming onto the market. These “smart phones,” all costing around $$00, let users dash off quick e-mail and tap national phone-directory services. US Order’s Inteliphone even lets you check lottery results.
It all sounds good, but is it what consumers really want? WebTV’s set-top boxes, made by Sony and Philips Magnavox, are being sold nationwide for about $400, which in-eludes an infrared keyboard. Sony executives claim the response has been overwhelming. Indeed, when QVC featured the product earlier this month, 500 units sold in 10 minutes. Sony Electronics president Carl Yankowski says he believes that WebTV could be the biggest hit since the Walkman.
Sony might be a little too optimistic. Josh Bernoff, senior analyst at Forrester Research and a critic of the set-top-box idea, says the Web, basically a text-and-graphics medium and a slow one at that, simply can’t compete with the expectations of the average television user. “Compared with ‘Baywatch,’ the Internet is an extremely tedious experience,” he says. Tim Bajarin, president of the research firm Creative Strategies, agrees. “There are some early adopters in the consumer channel who will buy some WebTVs, but they’ll end up in the closet by spring,” he insists. Even Shanaban, the enthusiastic WebTV tester, isn’t so sure he’d spend the money. “On my budget it would be a stretch,” he says. “And there’s no printer.”
And there are other costs. Today’s Web content and e-mail might not seem worth the $20-a-month Internet access charge, without which the WebTV box is, well, just a box. But WebTV CEO Steve Perknan points out that the company doesn’t contrive to compete with television. While TV is a broadcast medium, the Internet’s narrowcast model caters to specific interests. “WebTV brings these two worlds together,” Periman says. For instance, TV sets with the picture-in-picture feature would allow users to watch a television cooking show in a window and go to the show’s Web site for the recipe.
Diba has a slightly different idea. Founded by two brothers who defected from Oracle Corp., the start-up is designing the software guts for dozens of different single-task gizmos that, together, approximate the vision of a wired home. Among them: the CD-ROM-based Diba Kitchen, which hangs under the counter and serves up recipes; Diba Mail, a combination phone, fax and e-mail device, and Diba Yellow Pages, which retrieves online business listings. “The notion is not to starfie customers by giving them whole new devices they’ve never seen,” says Diba president Farzad Dibachi, “but totake something they use every day and add functionality to it.” Most Diba-based products are expected to sell for less than $$00, which seems to be the psychological threshold in consumer electronics.
Skepticism remains. Panasonic will make the Diba Marl machine, but Diba is still seeking partners for the recipe and other devices. Duncan Davidson, managing partner at the MeKenna Group in Palo Alto, thinks we are now in the “teehno craze” phase of info appliances. “The leap from thetechno craze to the consumer is a very big leap,” he says. Whoever succeeds in jumping Carl Lewis-like into consumers’ hearts and wallets could win big. Market-research firm Paul Kagan Associates projects a $6.6 ballion info-appliance market by 2005. If that’s the case, then whether it’s WebTV, Diba or some gleam-in-the-eye start-up that prevails, the time for bringing the masses into the Information Age has never Been riper.
