BUSINESS MARKET RIPE FOR INTERNET APPLIANCES;ORACLE, APPLE SUN, NETSCAPE READY STANDARDS; MASS APPEAL IS STILL IN DOUBT

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Despite the early hype over the concept of a mass-market network computer, it appears demand for such devices will be stronger first in the business market.

"I don't think the NC, at least as it's designed now, has any consumer potential," said Tim Bajarin, president of Creative Strategies Research International, San Jose, Calif.

Added Josh Bernoff, senior analyst at Cambridge, Mass.-based Forrester Research: "I'm certain these devices will fall flat on their face" in the consumer market.

ORACLE TWEAKS PLAN

Even Oracle Corp. CEO Larry Ellison, who championed the NC as the "$500 computer" for the masses last fall, sees business and education as key initial markets.

Four computer powers-IBM Corp., Sun Microsystems, Netscape Communications Corp. and Apple Computer-last week joined Oracle to announce technical guidelines for NCs (http://www.nc.ihost.com). They plan to agree on final guidelines in the third quarter, and NCs should begin to appear this fall.

The NC protocol was endorsed by dozens of technology companies, with Microsoft Corp. the notable no-show.

IBM EYES CONSUMERS

IBM is testing business NCs and plans to enter the consumer market; Apple sees commercial and consumer potential for two devices, Pippin and Newton, that it expects to qualify as NCs.

Other companies plan to build NCs, though few specifics have been announced.

No joint marketing campaign is planned to promote the NC, which has its own logo that Oracle will let qualifying partners use for free. One executive close to the company acknowledged that while Oracle has the trademark for the "Network Computer," anyone can use the term without the capital letters.

Even without the "NC" banner, players are still jumping into the Net appliance market, although slow modem speeds and a lack of interesting entertainment content on the Web will likely limit their potential.

NEW USES FOR OLD TECH

Japanese toymaker Bandai Co. will release Pippin @World, a $599 Net and CD-ROM device based on Apple technology; Philips Electronics will recast its faded CD-i device as a $750 Net machine; and Sega of America will introduce a $200 add-on giving Net access to its $200 Saturn game player.

All three will use the TV to display the Net. Zenith Electronics, meanwhile, will introduce TV sets with Web access under a venture with Net appliance startup Diba Inc.

Few marketing details have been announced for NCs or other Web appliances. Bandai, though, will spend about $10 million on a TV and print campaign starting in late August from J. Walter Thompson USA, Chicago, said Steven McAllister, VP-marketing and sales, Bandai Digital Entertainment.

"There is a fantastic niche for this type of thing," said Scott Miller, analyst at Dataquest, San Jose, Calif. "I don't know if this is really the implementation."

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