Web Appliances and Next-Wave Users

August 2000

UPDATE: Since I wrote this piece, my Mom bought herself another brand-name laptop to replace the one she already had. I wish she'd bought an iMac.

Compaq announced its iPaq Home Internet Appliance in the same month that IDC released The Next Wave of U.S. Online Users: Forecast and Analysis, 2000 to 2004.

According to IDC, the number of Internet users in the United States will double, making the population of the Net more like that of the country as a whole. The demographics of this new group are significantly different from those who are on the Net today. The new group is older and poorer than the population we're used to serving. And it's going to be devices like the iPaq that will lead them on to the Net.

Those over age 55 (20 million new online households) and those with annual household incomes under $35,000 (15 million new online households) will be the fastest-growing groups of new Net users in the next five years. For many in these groups, buying a PC has become a necessary evil for getting on the Internet. For these people, the Web isn't simply the "Killer App." It's the only one.

The simplicity of the iPaq is a good fit for this group. However, some issues still have to be resolved to make it work for them.

For a first version, this device is well thought out and does a lot of the things that most users are going to want it for. Aside from the pointing device, the hardware design is elegant and usable. The software could use some refinements, such as support for multiple accounts and RealAudio. However, these are quibbles, and it is possible for Compaq to fix them with new software.

A bigger problem is the dubious wisdom of bundling the hardware with the Internet service provider (ISP). This device works only on MSN and with no other ISP. People who are already on the Net are not welcome. Even those with conventional MSN accounts must pay an additional monthly fee. This limits the market in multiple ways, locking users into a service they may not want and preventing them from moving to high-speed access or buying the iPaq as a second device for another part of the house.

Will This Solve My Mom's Problem?

The iPaq hits a lot of the items on my checklist for Mom's access device. It's fast, simple, easy to use, inexpensive, supports Yahoo!'s Java games, makes email easy and friendly, and doesn't take up a lot of space.

But Mom loves America Online's games as well as Yahoo!'s, and this makes the iPaq's ISP-bundling a major shortcoming. Later this year, AOL and Gateway will release their new device, which could solve this problem.

But for another $100, I can get her Apple's new low-end iMac, a computer that approaches the simplicity of a dedicated Internet device yet retains the full functionality of a personal computer. That should make it popular with a lot of next-wave users. And it works with any ISP, including AOL and MSN. No wonder manufacturers are trying to "add value" to these devices with ISP bundles.

We'll see what Gateway and AOL release, but if I had to do my Christmas shopping today, I'd buy Mom the iMac.