Top Stories of 2001, #4: PC Market Expands to Non-PC Devices

Almost a year ago, Microsoft Chairman and Chief Software Architect Bill Gates began espousing a concept he called the PC-Plus era, in which the PC would expand from its humble office roots and form the center of a digital hub in our lives. Today this concept is almost taken for granted, and the PC will clearly play a major role well into the future. But in January 2001 the concept wasn't at all obvious; Gates clearly designed his assertion of a PC-Plus era to counter arguments from Sun Microsystems' Scott McNealy and others that we had entered the post-PC era, in which the PC's relevance would fall as other computerized devices rose in importance.

The battle lines were drawn. Intel adopted to take a stance similar to Microsoft's and pushed its Pentium 4 processor as the ideal foundation for a digital-hub PC: Intel CEO Craig Barrett called the concept the Extended PC Era during his January 6, 2001, Computer Electronics Show (CES) keynote speech. A week later, Apple CEO Steve Jobs also launched his digital-hub strategy. These events quickly cemented the PC-Plus concept. 

Microsoft began the New Year on a high note with news that the company would integrate its Windows Media technologies into a wide range of consumer-oriented gadgets, including portable audio players and home stereo components. Windows Media gained acceptance throughout the year as manufacturers added the technology to portable audio devices, car stereo components and DVD players. On a related note, Windows CE devices started downplaying the CE label and used the Windows Powered label instead. Windows Powered devices included Ultimate TV for Digital Video Recorder (DVR) capabilities, Car .NET for computerized car stereos, and the Pocket PC.

Microsoft also unveiled its Xbox gaming system at the 2001 CES show; the device would ship in November. The Xbox was Microsoft's first overt attempt to get a PC into America's living rooms; the device featured a PC-like motherboard, an Intel microprocessor, an NVIDIA graphics accelerator, a hard disk, and other features common to PCs. The company was even upfront about some of its plans for the device, which included home-gateway functionality and broadband support (due in 2002).

In contrast, devices designed to supplant the PC began to fail by March, and I noted the one characteristic they all had in common: None of them worked with computers. Whereas portable devices such as MP3 players, Pocket PCs, and Palm OS-based devices were thriving (largely because they interacted with PCs and could take valuable data on the road in a portable format), Oracle's Network Computer (NC), WebTV, and 3Com's silly little Audrey device--which eCom killed in mid-March--all ran into the same problem: No one wanted a device that was almost a computer.

Take, for example, Sony's ultimate tool of the Post-PC era--the eVilla device, which looked like a PC, but wasn't a PC. I predicted that the Sony eVilla would be dead by the end of the year. Here's what I wrote about the product at the time:

"In January \[2001\], when I walked through the Sony exhibit at the Computer Electronics Show (CES), I spied a beautiful all-in-one PC in the distance and made a bee line for it. A stunning iMac killer, this device sports a Trinitron monitor with a portrait display, a cool enclosure that would give Apple fits, and a beautiful overall design that just made the whole package scream out at me, "Buy me, buy me!" I immediately wanted one. I looked at the name (eVilla), saw the price ($500), and said, "Yup, I'm getting one of these puppies." And then I noticed eVilla wasn't a PC. Instead, the device is Yet Another PC Replacement (tm), a la the NC and WebTV. It features email and Web access, using a keyboard and mouse, just like a computer. It runs on the Be platform, and Sony calls it a "Network Entertainment Center." But it's not a computer. So thanks for getting me excited about nothing, Sony. And I'll be here to say I told you so to you, too, when you cancel the eVilla within a year."

Imagine my surprise when that prediction was off by 5 months. When Sony finally released eVilla that summer, consumers stayed away in droves (the fact that you could get a real PC for $500 probably didn't help). In late August, Sony killed the eVilla (I suggested that the company sell a $600 XP-based computer instead, noting that Sony would sell millions of them); Palm soon swallowed up Be.

By the end of the year, precious few post-PC devices were left, aside from bizarre, expensive, and poorly selling digital entertainment centers (set-top boxes, in reality) from companies such as Compaq and Hewlett-Packard (HP). However, digital cameras, portable audio players, digital video cameras, and Pocket PCs sold well during the holiday season, making the Gates prediction come true in record time. Of course, this success didn't stop Apple's fans from claiming that Apple CEO Steve Jobs had invented the digital-hub concept, despite the fact that Gates announced his PC-Plus vision first (as did Intel CEO Barrett with his Extended PC Era CES speech). But no matter who deserves the credit, one fact became clear when the dust settled at the end of 2001: PCs will remain the center of our digital life for some time to come.

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