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23. It is possible that, within the next few years, those consumers who otherwise would use an Intel?compatible PC system solely for storing addresses and schedules, for sending and receiving E?mail, for browsing the Web, and for playing video games might be able to choose a complementary set of information appliances over an Intel?compatible PC system without incurring substantial costs. To the extent this substitution occurs, though, it will be the result of innovation by the producers of information appliances, and it will occur even if Intel? compatible PC operating systems are priced at the same level that they would be in a competitive market. More importantly, while some consumers may decide to make do with one or more information appliances in place of an Intel?compatible PC system, the number of these consumers will, for the foreseeable future, remain small in comparison to the number of consumers deciding that they still need an Intel?compatible PC system. One reason for this is the fact that no single type of information appliance, nor even all types in the aggregate, provides all of the features that most consumers have come to rely on in their PC systems and in the applications that run on them. Thus, most of those who buy information appliances will do so in addition to, rather than instead of, buying an Intel?compatible PC system. Not surprisingly, then, sales of PC systems are not expected to suffer on account of the growing consumer interest in information appliances. It follows that, for the foreseeable future, a firm controlling the licensing of all Intel?compatible PC operating systems could set prices substantially above competitive levels without losing an unacceptable amount of business to information appliances.

4. Network Computers

24. A network computer system (sometimes called a ``thin client'''') typically contains central processing components with basic capabilities, certain key peripheral devices (such as a monitor, a keyboard, and a mouse), an operating system, and a browser. The system contains no mass storage, however, and it processes little if any data locally. Instead, the system receives processed data and software as needed from a server across a network. A network computer system lacks the hardware resources to support an Intel?compatible PC operating system. It follows that software applications written to run on a specific Intel?compatible PC operating system will not run on a network computer. Network computers can run applications residing on a designated server, however. Moreover, a network computer system typically can run applications residing on other servers, so long as those applications are accessible through Web sites. The ability to run server?based applications is not exclusive to network computer systems, however. Generally speaking, any PC system equipped with a browser and an Internet connection is capable of accessing applications hosted through Web sites.

25. Since the network computing model relies heavily on the processing power and memory of servers, the requirements for the user''s hardware (and thus the price of that hardware) are low relative to those of an Intel?compatible PC system. Still, a user who already owns a relatively expensive Intel?compatible PC system is not likely to abandon the investment and acquire less powerful hardware just because one of the least expensive components of his PC system --- the operating system --- is substantially more expensive than it would be under competitive conditions. Just as does the Mac OS, the network computing model presents a somewhat more attractive alternative to the first?time computer buyer. But as in the case where a prospective purchaser is considering acquiring the Apple alternative, a new buyer considering the network computing model must choose between types of computer systems. If the consumer opts for the less expensive hardware of the network computer, that hardware will not support an Intel?compatible PC operating system; and if the new buyer opts for the more expensive hardware of an Intel?compatible PC, an Intel?compatible PC operating system will almost certainly come pre?installed (and in any event represent very little additional cost relative to the price of the hardware).