Some of the biggest companies in high technology are betting that a cheap computer terminal will bring the Internet to the masses. Oracle Corp. and Sun Microsystems Inc. are the chief boosters of what they call the network computer, or NC, which they hope to see on the market by yearend. Essentially a simplified personal computer, the NC could make remote banking and other Internet capabilities possible for as little as $500. It comes without a screen - most envision the NCs linking up to televisions. Future versions could operate as personal digital assistants. NC advocates expect it to fill the current gap between $2,000 personal computers and $200 screen phones. "Once the network computer starts to become common in the marketplace, you will put personal information as well as banking information on the network," said Larry Martinez, West Coast director of financial services for Oracle, the Redwood Shores, Calif.-based software manufacturer. Users would have full access to the Internet and its E-mail and World Wide Web functions. Since information would reside on the network, it would beccessible from offices, airports, hotels, and other public places as easily as from homes. "Ninety percent of the functionality that we have in the PC is not used," said Roger B. Bertman, vice president and head of Verifone Inc.'s Internet commerce division. "Why not just eliminate the superfluous applications and make the interface better?" Promoting a system of open standards that allow information of various types and formats to course through the public networks, Oracle and Sun are teaming up with Netscape, whose Navigator software dominates the Web- browser market, as well as IBM and Apple Computer. In May the consortium put forth standards that manufacturers would be required to meet to use the network computer label. While the NC has been publicized as an Internet appliance for consumers, a spokesman for Sun said the company would also market the desktop device to corporations, with the powerful Java computer language embedded in it. The cost within a corporate work group could be a quarter that of a similar network of PCs. Oracle and others, meanwhile, are lining up to develop software tools that would facilitate NC use by the automotive, consumer goods, and energy industries, as well as government agencies and banking institutions. While the first version of the NC in the U.S. is still months away, in June the Taiwan-based Acer Group introduced a $500 computer with a slower-than- normal-PC processing speed, less memory, and a removable storage drive. The device, AcerBasic, is attached to a television monitor and will be marketed primarily in Taiwan, China, and Latin America. But the company has been deluged by requests for information from U.S. and European corporate users who want to customize the product, said Acer spokeswoman Jane Chen. The NC has its detractors, none more vocal than Microsoft Corp. Its chairman, Bill Gates, sees it as a diskless PC. "People want more power and more bandwidth," said Eric T. Jacobsen, president of Home Financial Network, a Westport, Conn., company that sells simplified home banking programs. "A communication device is not what the technologically adept consumer wants." Home Financial chairman Daniel Schley said the company is prepared to support home banking over the NC or any other device (see page 6A). But he said a bare bones Internet appliance might fall flat because it is a step backward in functionality. Telephone manufacturers have their own idea: screen phones, which can provide access to textual displays - up to and including access to the Internet - without having to boot up a computer and dial a modem. Last year Philips Electronics sold 30,000 of its high-end screen phones, with displays of 16 rows by 40 columns, and anticipates selling 500,000 of the $399 devices this year. Northern Telecom last year sold 125,000 of its eight-row by 20-column screen phones and projects a million this year at $324. "We see this as a replacement for everyone's telephone," says Paul Chapple, marketing manager at Philips Home Services. "For simple, quick transactions, I don't believe people are going to want to talk into their PC." He said Philips sees the PC, smart telephone, and interactive TV as a complementary troika soon to gain mass acceptance. The screens on Philips and Nortel phones have keypad-input systems much like those on automated teller machines. Building upon an existing alliance with Citicorp and the telephone company Nynex, Philips recently gave away 7,500 screen phones in Garden City, N.Y., for a consumer test. Their hypothesis is that consumers will want to make electronic purchases when there is a realistic chance that they can find what they want relatively quickly. Because 92% of Garden City households elected to receive the screen phones, local merchants have an incentive to advertise in an electronic "yellow page" listing. "The local pizzeria can't do deliveries over the Internet because there are only 10 guys here that have access to the Internet," said Ed Norris, publisher of the Garden City News. Meanwhile, the community newspaper began providing free news briefs over the phones' screen displays in June. "The Internet is like I-95. But there will also be local streets and local nets." The screen phones also will give Garden City residents the ability to pay bills through participating banks (right now only Citibank), view news headlines, do paging, and send or receive E-mail. "Consumers are snapping up screen phones like hot cakes," said Robert Haddock, a former Citibank officer who has been promoting the technology as president of M-Power Corp., New York. "The whole world is moving to the Web, but consumers are unable or unwilling to adopt the technology necessary to access the Internet." His M-Phone, to be available later this year, combines text-based features with access to the Web through a 4-inch by 3-inch back-lit screen. M-Power will work with a telecommunications company on sales and marketing. "Financial institutions will get a definite bang out of the home screen phone," said Berge Ayvazian, senior vice president of the Boston-based Yankee Group. He does see two versions of the NC gaining acceptance: one as a sort of set-top box atop the TV for entertainment purposes; the other serving as a personal-information phone, minimizing Web surfing and maximizing information content and interactive value. Whether that information phone starts out as a phone or as a network computer, it could be a key to interactive services from financial institutions.
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