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Compaq planning quick-and-easy Internet device

As with IBM, Compaq Computer is moving into the "Internet appliance" market and, along with it, developing a business strategy that focuses on services and partnerships.

As with IBM, Compaq Computer is moving into the "Internet appliance" market and, along with it, developing a business strategy that will stress how the product is used rather than the device itself.

Compaq is planning a simple keyboard-with-screen product, similar in some respects to the "emessage" device from Cidco, which Southwestern Bell and Pacific Bell are selling, according to sources familiar with the device.

The Compaq product, slated for release next year, will offer rudimentary email and Web browsing capability.

As reported previously, IBM is also planning a simple and inexpensive "countertop" computer which provides quick access to the Internet and email. In a similar vein, NEC and Intel launched a phone/web terminal project in Japan earlier this fall.

Analysts are quick to point out that these devices won't replace the PC, an extremely versatile product, that is still snapped up by tens of millions of consumers each year and getting cheaper.

"There's no Shockwave [video] or MP3 [audio] on these devices. These are used just to get a quick tidbit of information when you're on the sofa or in the kitchen," said Kevin Hause, an analyst at International Data Corporation.

"The average buyer wants one thing--something that's very flexible. That is a PC," said Frank Dzubeck, president of Washington DC-based Communications Network Architects.

One of the intriguing aspects of these information appliances and one of the biggest points of departure from the personal computer is that the device becomes secondary in the total equation: The application, service, and partnerships are the driving forces behind the business, according to sources familiar with both companies' plans.

"The software is transparent. It's not that important," said one source, regarding Compaq's device. That thinking also applies to the hardware. The concept is a radical break from selling PCs which stress the latest-and-greatest hardware and software to move boxes. Services and partnerships are usually a distant second.

That will change with some of the information appliances. Compaq, for instance, is looking first and foremost to partner with banks and telecommunications firms. Banks may offer the Compaq device for customers wanting to do home banking, said one source.

There will also be comarketing and codevelopment according to one source who called these "affiliate" programs. Compaq is also expected to focus on markets outside of the U.S.