Desktop computers getting short shrift at big computer show

LAS VEGAS - It's an irony of the Internet age that one of the last things high-tech mavens want to see at the nation's biggest computer trade show is personal computers.

Cable modems, cellular phones and other wireless Web surfing gizmos instead held court among visitors at Comdex, prompting the show's organizers to joke, ''Maybe we should call it dot.comdex.''

This shift away from the PC-dominated world now has many companies talking about reinventing themselves in a survival-of-the-fittest frenzy to focus on the Web as the way to connect people to business, ideas and entertainment.

''Every industry and every company is in transition, a transition to determine not only their growth but their survival,'' John Chambers, chief executive of Internet equipment provider Cisco Systems, said Tuesday. ''The virtual hand of the Internet is helping you, if you will, determine your future.''

As consumers become more comfortable using the Internet to shop, gather information, entertain themselves and do business - and high-speed connections make those tasks easier - companies are looking for ways to reach people wherever they may go and grab a share of an e-commerce market that could be worth as much as $1.5 trillion by 2003.

Traditional hardware such as desktop PCs are rapidly losing ground, often being given away or sold at-cost nowadays as part of Internet-access related deals. Meanwhile, people soon will be able to jump on the Web from their car, bus stops, gas station pumps - even watches.

In a new survey, research firm International Data Corp. estimates that companies by 2001 will ship 18.5 million Internet ''appliances'' such as hand-held devices, vs. 15.7 million PCs.

In remarks to conference participants earlier this week, Sony Corp. chief executive Nobuyuki Idei likened the Internet's undermining of PC-based models to that of a giant meteor that destroyed the dinosaurs.

''The Internet and (high-speed connection) networks are both a threat and opportunity for us all,'' said Idei, whose company next year will offer the PlayStation II game console that will be able to surf the Web and offer computing functions without using the Windows operating system.

All this is provoking change, even among such traditional industry leaders as Microsoft Corp. and Intel Corp., who dominated the market by being the first to offer consumers the operating systems (Windows) and microprocessors (Intel) that run desktop computers.

Wall Street investors have acknowledged the Internet's power by giving companies such as online retail powerhouse astounding market capitalizations. Amazon was worth $26 billion based on Tuesday's closing stock prices - and it's never made a profit.

Even Santa Clara, Calif.-based Cisco - hardly a name most consumers are familiar with - last week surpassed its Silicon Valley neighbor Intel in market capitalization and is worth nearly $280 billion. That makes Cisco the third most valuable company in the United States, behind Microsoft and General Electric Co.

Companies now are parroting the same lines in speeches here, noting they are ''transforming'' or ''reinventing'' themselves to provide services and ideas for both businesses and consumers.

''The discussion at hand today is: What personal device will people be carrying with them (to access the Web) and how will it interact with other devices?'' said Jonathan Rogers, general manager for market development of Microsoft's Windows consumer electronics operating system.

Hewlett-Packard Co. chief executive Carly Fionina put it more simply: ''Products become much more valuable when they are surrounded by services.''


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