Broadband access only: IBM's dumb terminal wins service provider converts

As broadband technologies such as DSL and cable modems continue to reach farther into the mainstream consumer market, but IBM is betting on an alternative device that will bring users high-speed Internet access and give the company another potential inroad to service providers.

IBM last week unveiled its new Internet appliance - a dumb terminal similar to a PC in appearance but dependent upon a connection to function. The device features a 10-inch color monitor on a flat screen and a wireless keyboard.

"PCs are good enough with what they do, but there's the inception and growth of broadband technology," said Brian Connors, vice president of Net device alliances for IBM's personal systems group. The Internet appliance lets IBM partner with ISPs, telephone companies and application service providers (ASPs) that want to create dedicated content, applications and services, he said.

"[We want to] help enable the marketplace with partnerships and solutions to get on that bandwagon of broader, simpler, easier to use Internet with broadband technology," Connors said.

As it prepares to test the new appliance, IBM has teamed with Bell Atlantic, SBC Communications and ISPs LaserLink.net and Planet Computer. IBM also has signed Internet appliance-related deals with Fidelity Investments and Lycos.

Bell Atlantic and SBC have not finalized trial details but plan to target residential and business customers. "We probably will go to larger business customers or those with potential for Web-based applications," said an IBM spokesman. And as applications such as online grocery shopping and home networking - where devices such as refrigerators are connected to the Internet - become more popular, residential users also will play a role.

In addition to full Web browsing, the appliance will let service providers offer customers centralized applications. Vertical markets, such as airline, financial or health care industries, could use it to create physical portals for delivering new applications, Connors said.

The Internet appliances should be popular in these vertical markets, said Maria DeGiglio, a senior analyst with D.H. Andrews Group. "It's a lot less maintenance," she said. "It's something more intuitive for the users, and it has the opportunity to be more directed toward the particular market."

Service providers also could create applications geared toward specific business groups, such as stock traders. And they can create specific start pages for consumers, adding applications and plug-ins as necessary, Connors said. "It gives confidence and some level of control to the service provider."

IBM also is viewing the device as an alternative approach to Internet access in the home, Connors said.

As the ASP market continues to heat up, this device "will play a huge role," DeGiglio said. "[Companies] can use the Internet appliance through a customized portal and access the applications," she said.

Joining the ranks of companies moving the Internet beyond its PC boundaries, software provider PacketVideo is taking the industry's latest crack at videophones, but with a twist. The company last week announced two alliances that forward one- and two-way video streaming capabilities in a mobile environment.

Under an agreement with NEC, the companies will combine NEC's video cell phone platform with PacketVideo's PVPlayer MPEG 4 decoding software to create one-way video streaming. This is aimed at bringing live video, such as traffic and weather images, to NEC's wireless devices, said Don Reckles, director of communications for PacketVideo.

"We do not expect somebody to watch a two-hour movie or even a 20-minute television program on a hand-held device," Reckles said. But when checking traffic conditions, an actual picture of the scene is more helpful than a reporter saying traffic is moderate, he said.

Under a separate announcement, PacketVideo is teaming with Sanyo North American to develop a two-way wireless mobile videophone by 2001. The videophone will use the 3G 324M protocol stack in PacketVideo's MPEG 4 wireless multimedia software to enable real-time video and audio over future 2.5 and 3G networks.

"Sanyo presumably will have a small camera on [its device] so you are actually doing two-way videoconferencing," Reckles said.