Dial I for Internet

By Anita Hamilton/Las Vegas

No matter how cheap or simple the personal-computer industry makes its new PCs--and many now sell for less than $1,000--they still daunt many would-be users. But a new wave of "information appliances" has begun to bridge the gap between PCs and consumer electronics by bringing capabilities such as e-mail and Internet access to TVs, telephones and other homey devices. Unlike even the least expensive PCs, which are designed for a variety of uses, information appliances focus on a few core functions and usually sell for $500 or less.

Such smart machines were among the hottest items unveiled last week at the computer industry's vast Comdex trade show in Las Vegas. Want a phone with a screen and pull-out keyboard that lets you surf the Internet? Samsung's Web Video Phone will hit stores in late February with a price somewhere south of $1,000. For those who'd like a touch-sensitive tablet that receives e-mail, news and weather, Global Converging Technologies will roll out its Cendis Net Display next summer for about $500. Philips' Ambi system, due out in February for $500, will turn any TV into a second home PC by using a wireless receiver that can pull video and audio signals from a computer as far as 150 ft. away.

The show offered plenty of rivals for today's most popular information appliance--3Com's Palm III (previously called the PalmPilot), a $350 handheld digital organizer for storing appointments and addresses, jotting down quick memos and sending e-mail messages. Casio, Everex, Philips and Uniden all showed off their copycat devices running the Windows CE operating system.

Consumers have been snapping up all manner of information appliances at a rapidly growing rate. Americans this year will purchase more than 2 million smart machines, ranging from two-way pagers to Web-TV boxes that bring e-mail and the Internet to TV screens. That will nearly double the sales of such devices from last year--and the market is just starting to expand. (Sales of home PCs have been increasing at the pace of 23% a year.) According to the research firm IDC of Mountain View, Calif., the market for information appliances will grow from $485 million in the U.S. today to $4.2 billion in 2002, when it will surpass the demand for home PCs. "Computers are still too complicated and too expensive," says IDC's Sean Kaldor.

While no one is predicting the demise of home PCs, smart appliances could soon overtake them as the preferred means for sending e-mail or accessing the Web. "You shouldn't need a $1,000 computer to listen to radio broadcasts or make phone calls over the Internet," says John Latta, president of the research firm 4th Wave of Alexandria, Va. PC-wary shoppers would heartily agree, of course. And the intelligent devices that are heading into stores could encourage even technophobes to get connected.