November 17, 1999 Web posted at: 10:59 a.m. EST (1559 GMT) by Nancy Weil

From...

(IDG) -- We have seen the future at the Comdex trade show, and it's not the PC.

Bill Gates opened the show in Las Vegas Sunday night by insisting in his keynote speech that the PC is here to stay, but then he spent a good bit of time showing off devices that aren't PCs. Of course, the view of the Microsoft chief is that his company's Windows platform will continue to dominate the market, and in that world view the market is still PC-centric.

That is not, however, being borne out on the Comdex show floor, aside from the big splash being made by the forthcoming Windows 2000; after 20 years, the trade show has become less about PCs and more and more about the Internet and devices that connect to it. Those devices, visitors here will find, increasingly will not rely on the Windows platform -- and will not be PCs.

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CNN's Anne McDermott reports on the gee whiz items available at this year's Comdex. QuickTime Play Real 28K 80K Windows Media 28K 80K
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Comdex

The focus is moving to what users really want, and users, as some vendors like to say, don't care about what makes their computers and gizmos tick. What they want is access to data, often via the Internet, or services, and they want that access fast without the hassle of waiting for their machines to boot up, preferably on a sleek-looking device.

Gates spoke of recent market statistics that U.S. PC penetration has hit 54 percent, with more than half of those machines connected to the Net. But that point fails to take into account what is found on the show floor. Vendors are displaying a vast array of other devices that feature Internet connectivity, from pagers to cellular phones to personal digital assistants on the handheld front. The future also will find Internet-connected automobiles and refrigerators. Gates' point also ignores the rest of the world.

"The U.S. is under the false impression that it is the leader in mobile communications and non-PC devices," Sony President and Chief Executive Officer Nobuyuki Idei said in his keynote Monday. "Europe and Japan have a considerable lead over the U.S. and this gap could widen in the future."

The focus of the future will not belong to the PC, he said.

"The PC was the office tool," Idei said. The future belongs to Internet access devices, Idei said, adding that those will include game consoles, smart phones, set-top boxes, digital televisions and wireless handheld devices.

Like others here, he was quick to note that "of course, the PC is not dead." Indeed, no one is suggesting that it is dead or even dying. PCs can be likened to an only child forced to make way for younger, smaller siblings.

By 2001 or 2002 information appliances, as the raft of non-PC devices are collectively called, will overtake PCs in volume shipments, according to Kevin Hause, manager of consumer devices research at International Data Corp. (IDC)

Wireless information devices are hot here, seemingly displayed at every turn. Bluetooth wireless technology also is getting a lot of buzz, although there aren't yet any Bluetooth products on the market and there won't be until interoperability tests are complete. Products could be out in the second quarter of next year.

In the meantime, a big question is whether Microsoft will repeat its desktop OS success in the market for small mobile devices.

Though Microsoft CE is being used on many "PC companion" products -- small computing devices with keyboards like Hewlett-Packard Co.'s $899 Jornada 680 -- the market for small computing devices is dominated by Palm Computing's handheld Palm device, said Diana Hwang, an IDC program manager.

The Palm, which runs on the PalmOS platform, has 72 percent of the market for smart handheld devices, Hwang pointed out.

"These types of devices, which we call personal companions, sell a lot better than the PC companions," she said. Larger PC companions cost more.

"The price has to be right -- anything above $499 really doesn't sell," Hwang said.

Many PC companions now are crammed with technology offered on full-fledged PCs, but mobile device buyers might not be looking for that.

"You can't just load a device with lots of technology and expect people to use it ... (Vendors) have to figure out that market they're targeting, whether they want to reach people that have heavy data entry needs, or people that mainly want to view data, for example," she said.

Design also is becoming a key element in whether a device is a hit.

"You'll be seeing a lot more elegant types of design, sleek products that are differentiated by color for instance -- not necessarily by the technology that's inside" said Katrina Dahlquist, a senior analyst at IDC.

While the emphasis on appliance devices has been increasing the past several years at Comdex, when it comes to PCs -- the traditional focus of the show -- visitors this year also are hearing a new OS theme that suggests Microsoft's days of market dominance may be on the wane.

Linux vendor Caldera Systems Inc. executives are trumpeting Linux as the OS of the post-PC era. They aren't the only ones singing that song. Michael Cowpland, president and CEO of Corel Corp. launched the Corel Linux OS for the desktop, further suggesting that Windows' stranglehold on PCs is loosening.

"DOS had 10 years, Windows had the last 10 years and now it's time for Linux to surge ahead," he said.

Marc Ferranti, Terho Uimonen, Rebecca Sykes, Mary Lisbeth D'Amico and Clare Haney contributed to this report.