September 18, 2000 6:30 PM PDT

3Com delays launch of Web appliance

Sleek Web-surfing appliances are the technology of the future, at least for another month.

Sources say 3Com was on the verge of launching a Web-surfing countertop appliance, but the launch has been delayed--most likely until next month at the earliest.

Instead of a product announcement, 3Com and National Semiconductor plan to announce tomorrow that they are working together on products for the so-called information appliance market.

The unit, the first member of 3Com's Ergo family of appliances, has an 8-inch, color touch screen. It uses a combination of the Palm and Unix-variant QNX operating systems and is powered by National Semi's Geode processor. The first Ergo device is designed to connect to the Internet through either a broadband or dial-up account and can also sync directly to Palm-based handhelds.

A 3Com representative said today that the Santa Clara, Calif.-based company has publicly committed only to shipping the product this year. Company chief executive Eric Benhamou first committed to launching a family of Internet appliances at the Consumer Electronics Show in January.

"We have not really finalized a schedule, but it will happen very soon," the representative said.

Despite the delay, 3Com is late for a party that has barely started. A number of smaller companies, such as Netpliance, have released simplified terminals for surfing the Internet. Most of these companies have experienced financial losses and limited sales.

Intel, Compaq Computer and other large companies have recently entered the market. But, like the smaller companies, they face a problem with pricing. Because of the high cost of screens and hard drives, these simplified devices cost almost as much to make as a PC.

The first Ergo from 3Com is likely to sell for $450 to $500--about the same as a low-end PC or high-end handheld. Unlike competing countertop devices such as a yet-unnamed Gateway-America Online unit, 3Com is not looking to a particular Internet service provider to subsidize the unit through a service contract.

The 3Com representative said the appliance will be easy to use because it is more like a personal digital assistant on steroids than like a PC on a diet.

Analysts say there is a market for Web-surfing devices but point out its limits given the cost of components such as flat-screen displays and flash memory. International Data Corp. predicts the market for Web terminals will grow to 5.5 million units by 2004.

 

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