November 13, 2002 12:49 PM PST

Gates' Comdex: Net appliances redux


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Microsoft Chairman Bill Gates will show off "smart objects"--small, Internet-enabled household items--at Comdex next week, as PC makers gear up for the second wave of Internet appliances.

The smart objects program revolves around delivering Internet information to alarm clocks, kitchen appliances, stereo equipment and the like, say sources familiar with Microsoft's plans. These devices, which could come out as early as 2003, will contain Microsoft software, energy-efficient processors and built-in wired or wireless networking capabilities, sources said.

Smart objects could also revive the "agent" concept, with software that anticipates an individual's needs, said Tim Bajarin, president of consulting company Creative Strategies.

"Besides telling the time, (a smart objects clock) tells you the weather and it tells you the road conditions on your preferred way to work," Bajarin said, speculating on Microsoft's plans.

Microsoft did not immediately respond to requests for comment.

To date, Internet appliances have been an unrealized dream for PC and electronics makers. At Comdex in 1999, Microsoft unveiled the MSN Web Companion, a simple-to-use, inexpensive Internet surfing device. Compaq Computer and others marketed these devices, but they disappeared a few months later. Intel and 3Com also came out with terminals, which likewise died young.

Proponents, though, say the experience could be different this time. Handhelds, intelligent cell phones and even the digital music revolution have acclimated the public to accessing the Internet on things other than PCs.

The sudden growth of Wi-Fi wireless networks has also created demand among consumers for omnipresent data access across a wide variety of devices. TV and stereo makers are starting to put USB ports and PC card slots into their products, said Richard Doherty, principal analyst at research company The Envisioneering Group.

"This is just like when the first TVs had video and audio jacks," Doherty said, adding that home networking will be one of the major themes at Comdex.

Conceptually, smart objects will likely be similar to smart displays, portable Internet tablets running a version of Windows CE. National Semiconductor and several electronics manufacturers, in fact, will be showing off prototypes and upcoming versions of smart displays at the weeklong convention in Las Vegas.

The first smart displays will appear in the first quarter of next year, according to several sources.

Although Microsoft is the driving force in the smart objects program, the company will likely leave manufacturing, product design and branding of such devices to hardware makers, said sources, a situation similar to how smart displays will appear.

Despite Wi-Fi and the other recent developments though, smart objects could face an uphill battle for acceptance. PCs remain the primary conduit to the Internet. Shoppers also have a long memory and won't likely forget Internet appliances, said Roger Kay, an analyst at market research company IDC.

But at least the name is better.

"'Appliances' is pretty down-market. It sounds like a washing machine with legs," Kay said.

 

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