Family time, gathered around the PC Intel and Toshiba are selling concept to manufacturers


SAN JOSE, Calif. -- Like the family of the 1930s huddled around the radio, or its counterpart in the 1950s gathered around the TV set, Intel Corp. is working on a project to lead families in the late 1990s to gather around a large color monitor attached to a PC.

Intel has dubbed the concept "social computing."

Not content for PCs to be relegated to the home office, Intel and Toshiba America Information Systems Inc. have quietly begun evangelizing the "Family Room PC" to PC manufacturers, with an eye toward wide availability of the new systems in fall 1997.

The Family Room PC, which will come in many shapes and sizes from various vendors, is not a new idea.

PC-TVs have begun appearing on the market, but this represents a new effort by Intel, whose position as the world's largest maker of microprocessors tends to heavily influence the design decisions of PC makers, to join its PC-TV bandwagon.

Under the plan, the PC-TV will use a large-screen color monitor and a TV tuner that transforms the PC into a smart TV.

Home users will be able to plug in their surround-sound speakers and play movies off their digital video discs, for example.

Some Family Room PCs will offer a message center for telephone and electronic mail, while others will offer video conferencing.

Family Room PCs will have wireless devices, such as keyboards and joysticks that will let groups of people watch television, play games, surf the Internet or control home electronics devices.

The idea of the PC as the family's central socializing area has attracted skeptics already.

"One of my points of skepticism about the PC-TV is it's a group device," said Steven Tirone, research analyst with International Data Corp. "Can you imagine mom and pop and junior fighting for control of the joystick?"

Today's PC, for home and business use, was crafted for a single user who sits about two feet from the monitor and mostly uses the tool for personal productivity. The new Family Room PCs are big enough that families can sit 10 to 12 feet away.

The Family Room PC doesn't introduce new technology but integrates a number of emerging technologies onto the PC's main circuit board, or motherboard.

"[The PC] should have better graphics and better web browsing than a single-function appliance," said Mike Aymar, vice president and general manager of Intel's desktop products group.

"It's a more complete, more flexible device."

PC-TVs will start off as relatively expensive products that appeal "early adopters" who want to be the first to have the newest electronic gadgets.

But as prices decrease, as most computers and consumer electronics products do, more and more people may tune in to PC-TV.

"You'll find a range of products for the Family Room that initially might be a little more expensive than today's mix of PCs, but quickly they will reach all the same price points that home/office PCs hit today," Aymar said.

L There are drawbacks to the PC-TV besides its price, however.

It's built around the Windows 95 operating system by Microsoft Corp., for one thing. Television watchers who are used to instantly switching on their TV might tire of waiting for Windows to come on, or "boot up."

And if the operating system crashes during a cliffhanger episode of the "X-Files," viewers might not be too pleased.

PC makers briefed by Intel said the devices could range in price from $3,500 to $5,000.

Already, prices for the first PC-TVs are coming down.

Gateway2000, a Sioux City, S.D., PC manufacturer that sells its products mostly through mail order, is a pioneer in this nascent market.

Its first "Destination" PC-TV began selling in May. This week the company broke the $3,000 price barrier by cutting almost $700.

Analysts said sales for the early PC-TVs, including the Destination, are disappointing.

"One of the reasons Gateway resorted to placing [Destination] in selected outlets is it's not moving very well," said Walter Miao, senior vice president of Access Media International, in New York City.

"It seems difficult to sell a $4,000 system sight unseen."

Stacy Hand, product marketing manager for the Gateway Destination, said sales have "met expectations" but acknowledged that consumers are resistant to change.

"When you're developing a new product category, you can't base its acceptance on the first six months of sales."

Gateway's Hand added: "There's no question the PC will be the centerpiece of the home entertainment system. Everything else, the appliances like VCRs, the gaming machines, are going to be in the beginning attached to it.

As the product evolves, those things will go away."

NetTV Inc., a small San Rafael company, makes a PC-TV that competes with Gateway's Destination, and other manufacturers including Compaq and Toshiba are expected to follow suit.

Intel is promoting the Family Room PC while its turf gets encroached upon by consumer electronics vendors who are offering lower-cost, simpler-to-use "information appliances," which aren't as powerful as an Intel-based PC but might appeal to consumers with less disposable income.

For instance, WebTV Networks Inc. has created a $300 device that hooks up to a TV monitor and lets users surf the web through a remote control device.

The resolution of TV monitors is not as precise as a computer monitor, but WebTV's offering is a viable alternative.

"Intel sees this shift in the industry, bringing the power of a computer to average people, but not in the form of a PC, and they're trying to get out there and pre-empt that, and say 'no, no, no, the PC is the perfect fit,' " said Joe Gillach, vice president of marketing at Diba Inc., a Menlo Park, Calif., developer of software for information appliances. "They're trying to protect their franchise."

Information appliances are designed for one or two specific uses, such as making phone calls and retrieving electronic mail, or surfing the Internet from a TV.

"We believe that what's happening is there is this big battle brewing in the industry, a sort of clash of the titans," Gillach said. "It's the PC manufacturers vs. the consumer electronics companies."

Pub Date: 10/13/96

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