Never mind the last mile. Forget the last 20 feet.
What happens to cable's data and modem plans when
Silicon Valley sells its last personal computer?
PC-makers are hand-wringing about the end of the PC as we
know it. They're talking about "segment zero," their term for the
under-$1,000 PC, which is likely to mean under-$700 devices, or even under-$500 devices.
These scaled-down devices will probably be more powerful and functional than that $5,000
machine that you bought just a few years ago.
Nonetheless, there's understandable concern about how
these cheap PCs will be used -- and about what it means to the industry that relies on
making hardware an expendable commodity.
As home-computer penetration reaches the 45 percent level,
what happens if there are no more "newbies?" What if everyone who wants a
computer already has one? Is it the same problem as cable-TV penetration, which seems to
have leveled off at about two-thirds of U.S. homes?
Maybe PCs can be nudged into a few million more households
-- plateauing, say, at 50 percent. Nonetheless, there's a growing expectation that
most of the new sales will be replacement units or second sets (or even third PCs) within
existing PC families.
Computer-makers are agog with ideas. Make the monitor
bigger (17 inches and 20 inches will become the norm), some say. If the easier-to-read
spreadsheet doesn't get them, the higher-impact games will! Enrich the sound. Add
smell-o-vision, or automated foot-rubs, while you're at it.
Make the processing faster, others insist, although a
recent technology report indicated that "Moore's Law" may soon have to be
repealed. (That Intel-inspired mantra of SiliValley offers an explanation for doubling
speed and halving prices every 18 months.) Suddenly, the laws of physics are getting in
the way -- especially the physical layout of integrated circuits.
But not to worry. Such problems (for now) dwell on high-end
computing. And the home market has plenty of access to the competitive low-end, especially
as Intel's dominance is shaken. Advanced Micro Devices, Cyrix and National
Semiconductor are escalating their campaigns for the desktops and set-tops of America.
Even Intel itself has unveiled (to widespread criticism) its own lower-priced, alternative
"Celeron" chip, a bare-bones Pentium MMX processor.
There are two ways to look at this looming PC dead end. The
easiest is to ponder the untapped opportunity within the 40 million U.S. homes with PCs.
The cable-modem juggernaut has captured barely 200,000 of these homes -- slightly fewer
than the total homes that have signed up for WebTV. The best opportunities lie among the
23 million PC-using households who are already logging onto the Internet via America
Online, AT&T WorldNet, EarthLink, Prodigy, MindSpring or thousands of other
dial-up-access providers. These homes are easy pickings (if the price is right) for
high-speed connectivity to their computers.
Except, possibly, in homes still lumbering away with
That's one reason why cable-modem mavens should hope
that the last PCs being sold are upgrades to enable experienced PC-users to realize what
end-to-end speed is all about.
The other way to look at the threat of the last PC is in
terms of what comes next. Do you know anyone who really loves his or her computer?
Don't count the geeks down in operations or accounting, or most of the area-code-408
For years, we've been hearing about information
appliances, about making computing capability invisible and about embedding processing
power into everyday gadgets.
Obviously, the set-top box -- especially an OpenCable
do-everything device -- could be one such appliance. There are other dedicated tools on
the drawing boards. Admittedly, the network computer has been a nonstarter, so far. But
it's early in this race for applications-specific devices that augment (if not
replace) the not-so-ubiquitous PC. This looming proliferation of specialty products,
hungering for connectivity, is one of the visions behind Sun's Java approach. More
important, it should figure into the plans for the really wired household -- whether it is
served by cable, telco or wireless connections.
Last month's intriguing Java alliance between IBM and
Sun for a new operating system (albeit mainframe-oriented at first) may offer a hint about
alternatives yet to come.
The opportunity to move beyond the PC is also one of the
reasons why chip-makers like C-Cube have been showing up at cable conventions, and even
broadcasters' conventions (when's the last time a TV station bought a set-top
box?). Sure, they see new markets in the living-room wars -- but they also recognize that
there's life beyond the PC. And they expect to be there.
The love affair with the PC (if ever it existed, except in
area code 408 -- now lapping into the new area code 650, as well) may soon be sidetracked.
But connectivity is not going away.
The next question may be: Connected to what?
I-Way Patrol columnist Gary Arlen longs for the
anthropomorphic days of home computers named VIC 20 and Trash-80.