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The personal computer? "Ridiculous," says Larry Ellison, chairman of Oracle, the world's second-biggest software company. It's too hard to use, too powerful, too costly. If Ellison and a growing band of digital seers are right, today's PC will soon be challenged by . . . an "NC," or "network computer," a no-frills sort-of-but-not-quite computer that performs basic chores easily and simply -- and sells for less than $500.
Sound too good to be true? You bet, say the folks who make those vanilla-colored boxes on sale at CompUSA. "It's fantasy," says Bob Stearns, a senior executive at Compaq Computer who professes to be "shocked" by pie-in-the-sky talk of cheapo PCs. "It will never happen. They're lying!" Nathan Myhrvoid, head of advanced technology at mighty Microsoft, the biggest software company, is no less skeptical. "People want more from their computers, not less. Sorry, I just don't see it."
As the personal computer nears its 21st birthday, controversy has erupted over its future. A virulent (albeit premature) strain of millennialism grips the industry; high-tech heavies are weighing in, taking sides, talking portentously of a coming technologic "paradigm shift." Many think the dawning of the Internet, the ubiquitous digital web linking some 50 million computers worldwide, marks a watershed for the PC. More and more, people are using computers as communicators, not the heavy-duty number-crunchers of yore. They're surfing the Net, downloading software, calling up information with the click of a mouse. No one really needs a complicated "mini mainframe" on their desktop anymore, the new thinking goes. Instead, people might prefer something easier and more friendly, a sort of "information appliance" that easily performs a few everyday household and business computing chores (such as word processing or videogaming) and is as nonthreatening as a television. "This is where things are going," says Paul Saffo at the Institute for the Future, in Palo Alto, Calif. "The PC is dead. It's the horse and carriage of the Information Revolution."
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Well, whoa. Before you pull the plug on that turbocharged Pentium in the den, remember this. History is replete with "new paradigms" that weren't, from Wang's original word processor to the more recent Newton, Apple's disappointing "personal digital assistant." Yes, PCs can be a pain. Consumers might indeed welcome an inexpensive alternative. But is an NC the answer? Larry Ellison thinks so. Far ahead of most rivals, Oracle already has a prototype. It's lining up manufacturers in Asia and plans to introduce the first consumer model during the first quarter of next year. Sun Microsystems, meanwhile, has instructed manufacturers to build 300 prototypes of a rival device. Apple computer and Japan's Bandai are collaborating on an Internet box named "Pippin," while Toshiba and NEC are working with Oracle--as are manufacturers in Korea and Taiwan. IBM and others are researching or developing related products. Says Richard Shaffer at Technologic Partners in New York: "Almost every company in the business is looking at this."
Much of the work has been secret, but NEWSWEEK has picked up some tantalizing details. Oracle's machine, for one, won't look a lot different from today's laptops. It will have a keyboard, a flat-panel monochrome screen, a modem and a mouse. It may be powered by a superfast 200 megahertz "RISC" chip, developed by Apple and Britain's Acorn Computer Group, and have four megabytes of memory. That won't give the power and versatility of a Pentium, say, but it will be as powerful as older 486 PCs. The machines will offer only the functions that people use most often: access to the Internet, e-mail, word processing, video conferencing. Why should people spend $4,000 on a computer and software, asks Oracle's vice president of technology, Andrew Laursen, when a $500 machine could serve as well?
Skeptics have questions of their own. Can the NC be made for $500, and will consumers want it? "Price could hold this back," concedes Sun's chief technology officer, Eric Schmidt. Keeping costs low means leaving a lot out. For Sun, as well as Oracle, that means no hard drive, no floppies, no color monitor, no CD-ROM. Schmidt doesn't see this as a deterrent for consumers, because, he says, the Internet has "changed the model for computing." Why do you need a hard drive, when Internet service companies can store unlimited amounts of data for you? Why buy your own software from Egghead when you can download it from the Net as needed, and often for free?
It's a seductive vision but not entirely convincing, at least to critics. For starters, the day when all the popular software you want can be gleaned from the Net is still far off. For another, the whole idea of a network computer runs counter to trends in the industry. People want more versatility, more power, better software. When they have a choice, they buy more expensive computers, not cheaper ones. "No one wants a dumb terminal," says Microsoft's Myhrvold. "It's an incredible long shot."
There are other problems. The new machines will be no faster than your phone link--and that can be slow. The Internet, moreover, is notoriously insecure; users might not want to lodge data and software there. Still, long shot or not, the NC could have at least one practical effect. Even if Ellison and others turn out to be hyping, they're clearly right about the future role of the Internet in distributing software. If you can dole out what Sun's Eric Schmidt calls "applets" of software as needed--say a word-processing program to a roving businessman, or a chunk of needed data--then you've potentially changed the way software is sold and distributed. Perhaps NCs will become the next "big thing." But remember the Wang.
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