Jack Schofield
The PC industry, neglected during the past two Comdex/Fall computer trade shows in Las Vegas, Nevada, returned to prominence with a vengeance.
Both Microsoft and Intel showed products that will take the PC to a new level of capability, while those promoting appliances and other alternatives were faced with what Bruce Stephens, group vice-president of worldwide personal systems research at the United States-based International Data Corporation, called “a business model conundrum”. Everybody thinks appliances simplified, dedicated systems have great potential, but hardly anyone has managed to make any money out of them.
The highlight of the show was undoubtedly “the tablet”, a flat pen-operated personal computer unveiled by Bill Gates, Microsoft’s chief software architect, during his show-opening keynote presentation. The tablet uses “digital ink”, which lets users manipulate their handwritten text in exactly the same way as word-processed characters. The demonstration showed how text, written on the LCD screen, could be moved around and even turned into slanting “italics”.
The tablet PC is still a PC with memory and hard drive, running Whistler, the codename for the next version of Microsoft Windows 2000.
However, it seemed to be the closest device so far to the Dynabook (Dynamic Book) computer proposed by Alan Kay, a Xerox Parc researcher, in the late 1970s.
Most of the ideas developed at Parc, Xerox’s Palo Alto Research Centre, have already become commonplace. These include graphical user interfaces (in the Apple Mac, Microsoft Windows and other systems), laser printers and computer networks. Kay was confident that continual annual increases in the power of microprocessors would eventually make the Dynabook feasible, and that day may now be in the foreseeable future. A large batch of prototype tablets has been produced for testing and Gates said systems could be on sale in about two years.
The unfortunate part of the tablet demonstration was that it was not possible to get a good view of the operating system. Whistler is destined to replace both Windows 95/98/Me and new technology Windows NT/2000. It will also give Windows a new interface, which has not been seen before, though users will have the option to stay with the “Windows classic” look, if that is what they prefer.
Whistler will run on any PC capable of running today’s Windows 2000, but it is a safe bet that it will also trigger another “upgrade cycle”. And users in the market for a new PC to run Whistler will be encouraged to opt for systems based on the new, more expensive Pentium 4 processors that Intel previewed at the show.
In the past year, Intel has had its nose bloodied by the much smaller AMD, which has been selling faster, cheaper Athlon processors. Intel hopes the Pentium 4, along with price cuts on the Pentium 3 line, will shift the balance back in its favour.
Although the PC market has also been getting a relatively bad press recently, IDC’s Bruce Stephens said: “The fact is, the growth rate is still pretty good.”
The PC market grew by 19% this year, with about 140-million units sold, and Stephens expected 17% growth next year.
According to IDC’s research, said Stephens, the growth of the Internet was “benefiting the PC market, not appliances”. Only 28-million appliances had been sold in the past year, though he was predicting sales of 48-million units in the next year.
Stephens said PC growth was particularly healthy in “new markets” (less-developed countries), and that the growth rate for sales of portable PCs was above 30%. “What’s driving this is students, home offices and small business users responding to lower prices,” he said.
Jerry Purdy, president and CEO of Mobile Insights, a Californian research company, agreed that the notebook PC was “becoming the standard in two major markets: the enterprise and the college market”. Notebook PCs were replacing desktops as business professionals became more mobile.
Purdy said this trend would be encouraged by the rapid acceptance of wireless networking. “Wireless LANs [local area networks] have arrived and are going to become pervasive, thanks to the interoperability of the 802,11 byte standard.”
However, Purdy predicted that “wide area wireless” based on cellular telephony would “continue to be a disappointment” because of low connection speeds, while Wap (wireless application protocol) “in its present form is never going to have wide adoption”. Purdy thought the mobile market would be a lot better when 3G (third generation) networks arrived. Some manufacturers have seen the appliance market and mobile computing as ways to avoid competition from PC industry giants. But the PC industry giants see these new areas as good places to expand their sales.
Intel, for example, is targeting mobiles with its StrongArm processors, a design it acquired when Digital Equipment was taken over by Compaq, and which was ultimately derived from the British ARM (Acorn Risc Machine).
Microsoft is also competing hard with limited success in the mobile markets with handheld PocketPC palmtops made by Compaq, Hewlett-Packard and Casio, and a mobile phone just launched in France by Sagem. During his keynote speech, Gates also showed a powerful prototype phone codenamed Stinger.