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New slew of tech toys on Intel's agenda

The chip giant, in conjunction with Taiwanese manufacturers, is showing off a number of prototype products at the Computex show.

TAIPEI, Taiwan--If Intel's plans to increase business outside of the PC market weren't already evident, one need only look to Asia to see where its future lies: Internet set-top boxes, PC/TV devices, even desk phones and MP3 players.

Chip giant Intel, in conjunction with Taiwanese manufacturers, is showing off a number of prototype products and reference designs this week at the five-day Computex show here to prove that PC technology can be crammed into small spaces.

The dominant theme at the conference is the inevitable rise of the Internet device and how traditional manufacturers must reinvent themselves to survive in this market.

While some of these products may never see the light of day, others are expected to be released later this year.

PanAsia Cable, for instance, is set to release its eDac, a PC/TV set-top box that combines a full Windows 98 PC, a DVD player, a Karaoke system, full Internet access, fax and phone capabilities, and "video" email, among other features, according to Roland Hung, an executive at the company. The system comes out in July in the Netherlands and Taiwan, but could spread to other markets, Hung said. Both Compaq and Dell have contacted the 30-person company about the device.

All-in-one boxes for the family room have failed in the past, largely because of exorbitant costs. PanAsia, however, has partly cleared the cost hurdle by using a relatively cheap 233-MHz Intel Pentium MMX or a Pentium II processor, boosted by a proprietary graphics processor. The system will sell for around $1,100 in the U.S., said Hung.

"Every PC giant is looking at promoting the PC in the family room," he said.

Further down the TV set-top scale, regional design house Paradise showed off its AiTV set-top based around a 236-MHz StrongARM processor and an operating system from Wind River Systems. The set-top provides full Internet functionality, as well as home banking through a cash-card slot on the front. However, computing functions are otherwise limited, an Intel representative said.

Will it fly?
Whether consumers want what Intel and its partners are building is anybody's guess, analysts say. Even if they do, manufacturers run the risk of building a device with a short shelf-life because of emerging standards for Web content.

"Alternative Internet access devices--Web phones, set-top boxes--those devices are going to have a hard time for the next three years, because the Web is immature," said Eric Schmitt, analyst with Forrester Research. While PCs are adaptable, information appliances are less flexible in their functionality. For instance, because there are no hard-and-fast standards for audio or smart cards, Schmitt thinks that some devices will become obsolete too rapidly to gain a following. Others just won't have the right combination of features.

"I see lots of device flops" in the next few years, he predicted. And while the Internet device is a huge buzzword, exactly how traditional PC manufacturers will reinvent themselves to survive in this low-budget market is not yet clear.

Many observers say set-top boxes focused on enhancing the TV experience will be at the center of emerging commerce opportunities, such as interactive commercials, online banking, and video on demand. The market for services enabled by next-generation TV set-top boxes is anticipated to be huge, because there is the potential to reach the consumers who may never buy a PC but want to have simplified Internet access.

Intel inside phones, too
Philips and Acer, meanwhile, are promoting desktop Internet phones. The phone's 8-inch screen can be activated by touch or through a wireless keyboard, and the unit can receive and send email as well as provide for full Internet access. Although both Philips and Acer are using the "Hermes" version of Microsoft's Windows CE on their phones, the reference design will work with other operating systems such as the Inferno OS from Lucent and PicoJava from Sun Microsystems. The phones use Intel StrongARM processors.

Intel is also showing off a "smart phone" at Computex, which is a cellular phone based around a StrongARM processor with a handheld computer merged into it. In addition to the obvious information management applications, the device comes with voice recognition technology and wireless fax capabilities.

Separately, K.Y. Lee, president of Acer Peripherals, said his company will release a smart phone with many of the same capabilities by the end of the year.

Finally, Design specialist Unique showed off an MP3 music player that deploys Intel flash memory.