Have miniaturisation and increased power made the pocket PC a useful tool at last?
VERY small computers are going to be the Next Big Thing, if the hype at last week's Comdex exhibition in Las Vegas can be believed. Pocket sized computers have been available for years, but manufacturers say they can now be made light, powerful and cheap enough to attract a mass market.
Last week LG Electronics said it had developed the world's smallest and lightest PC with Microsoft. The South Korean company's GP40M is 6.7 inches wide, 3.9 inches long, 1.03 inches thick and weighs only 11.9 ounces, the company said. It uses Windows CE, an operating system developed by Microsoft for handheld computers, and comes with either two or four megabytes of memory. Wireless data communications are built in.
Meanwhile, Compaq's president, Eckhard Pfeiffer, said he was scrambling to increase production of his company's new handheld because demand was much higher than expected. He said the strong sales indicated that the time for the pocket size computer may finally have arrived.
Compaq's PC Companion, which supports many of the features of a desktop computer and weighs less than one pound, went on the market last week. It also uses Windows CE and is compatible with desktop PCs so they can communicate back and forth.
"Response to the product is very strong. We had planned a certain volume and we're scrambling to pick up the volume because demand is stronger than anticipated," he said.
Pfeiffer said the PC Companion, which sells for between $499 and $699, was proving to be a popular item for people shopping for Christmas presents. "That's why we wish we had a few more of them," he said.
LG Electronics will not be selling the GP40M until early next year, when it plans to put it on sale for about $500. This should stoke the fierce rivalry with conventional notebook computers and desktops, a company spokesman said.
The GP40M cost $6 million to develop over the past two years. LG predicts sales of between 700,000 and 800,000 units in the first three years and it is also planning a wallet sized version.
The fledgling market for pocket computers is dominated by Hewlett Packard, Casio, Psion and Philips. Despite some very successful models (British company Psion has sold over a million organisers and computers) the market has been limited by the capabilities of the machines.
Frequently, they have been underpowered and overpriced. Many potential customers have dismissed them as gadgets for the technology addicted. LG Electronics predicts that new models will overcome this perception and expand the market to 1.2 million units by 1998 and two million by 2000.
These figures and Compaq's success with the PC Companion are in contrast to the failure of the Apple Newton, the most ambitious move so far by an established manufacturer into the pocket computer market. Despite a heavy promotional campaign by Apple, the original Newtons just would not sell.
"The Newton was too little too soon, and really left the customer disappointed," Pfeiffer said.
Exhibitors at the Irish Trade Board's stand at Comdex included Raidtec, International Translation and Publishing, IDOC Europe and Contract Europe.
Bill Gates struck an unusually defensive note while discussing the future of the PC on Tuesday. Addressing a crowd of 5,000 at the show, he said: "There will probably be some years there will not be any growth at all" in microcomputer sales during the next decade, even if the market experiences an increase overall.
Microsoft is working on its own projects to follow the move in the direction of less expensive, simpler machines.
As far as the PC is concerned, 1997 "will be a key year", Gates said. The machine, long seen as "a low end performance tool" compared to its powerful cousins, the workstations, will experience dramatic changes in 1997, he said.
He envisioned the application to PCs of parallel processing, a technology until now reserved to workstations that dramatically enhances power and speed.
PC makers and software vendors are relying heavily on corporate customers this year to make up for disappointing sales to consumers, executives at Comdex said. While many consumers have been putting off their computer shopping until early 1997 - when new gadgets come out - corporate customers are finally dumping their older PCs and buying lots of machines that can run the latest business software from Microsoft.
"Certainly we see a tremendously strong business environment as a major upgrade cycle is now occurring," said Michael Winkler, senior vice president at Compaq. "We think the fourth quarter will be excellent."
Winkler and other PC executives said the recent releases of Microsoft's Windows NT operating system and Office 97 package of business programmes were fuelling corporate sales. These programs work best with the computing horsepower of machines based on Intel's top of the line Pentium chip.
The fourth quarter has been disappointing to some PC makers, especially those that concentrate heavily on consumer sales. This time last year, the release of Windows 95 drew plenty of first time buyers to computer stores. The industry has no such attraction this year.
In fact, analysts said, consumers were putting off computer shopping this Christmas season as the industry prepares new machines based on Intel's upcoming MMX technology. MMX based machines, due to be released in early 1997, will feature better video, sound and 3-D graphics.