So much has been said about the convergence of computing, telecomsing the seeds for the convergence of Web and TV. and media technologies in the past couple of years, it's easy to overlook the realities of the market. Terms such as 'grand convergence' and 'bandwidth everywhere' have been thrown around the channel by the bucketload, but bear little resemblance to real life. But finally, after what feels like years of endless predictions that the Web will reach every home, and the false start of WebTV, home convergence is actually happening.
The future of the PC as a consumer device is just one of the issues to be sorted out as the three industries fight it out for the top spot in the combined market. The good or bad news - depending on your technological persuasion - is that Microsoft has taken a significant stake. Its purchase of $5 billion of AT&T stock brings to a head the long chain of media and telecoms investments and acquisitions by the Seattle company (PC Dealer, 12 May). Coming hard on the heels of billions of dollars' worth of purchases in smaller cable and media firms (see below), it is becoming clear that the desktop giant envisages a future as a mass-market provider of online consumer services.
Widely perceived as Microsoft's number one rival in this chaotic market is AOL, merged with Netscape and closely partnered with Sun Microsystems as of last November. The triumvirate had its own TV collaboration to announce last month, with DirecTV, Hughes Network Systems, Philips Electronics and Network Computer Inc - comparative minnows by AT&T standards. The alliance has a large installed base and solid technology product, but with Microsoft and AT&T on the other side, the outlook is not as bright as it was last year.
This summer will see the first of these products reach the market.
One likely Microsoft partner for the near future is Cable & Wireless (PC Dealer, 19 May). Widespread reports of Microsoft taking a large stake in C&W were neither quashed nor confirmed at the time of going to press, but they succeeded in sending C&W's share price into orbit. And well it might. The UK's second largest phone company and biggest cable TV provider will bring the internet into homes over set-top boxes in a large trial in Manchester this summer.
A representative at the C&W broadcast division says the intention is to bring a type of electronic briefcase to TV, which home users can tap into using high-speed cable modems that make your average 56K PC modem look trivial. 'They will provide data access at speeds from 2Mbps to 10Mbps from the customer's home to the Net, so it's at least 20 times faster than ISDN,' says the representative. 'In our trials, it's quicker than the ADSL package from BT.'
Fair enough. But what's going to be available on the service and why should it attract customers more quickly than PC technology, which is penetrating more and more households?
'The C&W package is designed for non-Web users, who form the larger portion of viewers. It's run from fonts, icons and drop-down menus which we expect people to explore gradually.'
But ease of use usually comes at the expense of functionality. The package will constrain users to 100 hand-picked Websites, covering a variety of interests from cinema to stock quotes to the weather. However, the interface will be distinctly unWeb-like and far more like digital TV, without a URL in sight. The representative adds: 'For the first few months we expect people to use it like Teletext, then to drift into shopping and banking through the interactive TV guide, which lets you programme in your favourite types of material and gradually move forward and play with the other applications.'
Play, it seems, is the operative word. 'In the trials, games are a popular feature. We just have a few classic games at the moment, such as chess, draughts and battleships. Interactive applications designed for sporting events are even more popular. Users can interact with each other and the event through two-way TV.'
The fact that Web and TV convergence is finally happening must be a great relief, both to those who predicted it all these years ago and to those whose livelihoods depend on it. At business exhibition Internet World last month - an event whose title should alert even the most causal visitor to an imminent tidal wave of hype - the mood was, for once, relaxed. Maybe it was the sunshine that attracted so many delegates outside the Earl's Court's exhibition centre. Whatever it was, the usual conference diet of non-stop promotional hysteria was replaced by an extremely laid-back attitude. Suddenly, everyone seemed genuinely assured of their future instead of scrambling madly at any potential customer who passed by.
Russell Clarke, general manager of multi-currency internet payment processing firm Worldpay, is convinced the efforts of the telecoms giants will soon bring an untapped army of consumers to the Web. 'If we ignore WebTV, cable companies - particularly the key US ones - are going to have a significant effect on the take-up of people's Web use, not just e-commerce. Costs are coming down, people can buy PCs from the world and his mother and everyone's using the internet - even my parents, which is outrageous,' he says.
It's not yet clear exactly where all these changes are taking us, is it? 'No, but everything's taking off,' Clarke adds. 'We like to think we're very flexible - you need to be when everything's changing.' So when will this army of consumers appear?
'We're not banking on it. We can wait a while before WebTV takes over, but it will have a significant effect on our fortunes when it does.'
Cisco reseller Ciscom was also in an upbeat mood, if less sure about the cable revolution bringing the Web to homes. With a stall surrounded by Star Wars paraphernalia, including Darth Vaders and a couple of Stormtroopers, one could have forgiven Ciscom for fearing a consumer revolution in IT as its own phantom menace. But according to Paul Stubbs, enterprise development manager at Ciscom, the opportunities outweigh the risks as sales of home networking equipment begin to take off. 'It's early days, but it's beginning to happen. When I think back just a couple of years, I still think it's extraordinary that people are buying networking kit for the home.'
However, in Stubbs' view, cable is anything but the last word: 'What we want is fibre everywhere and while cable is undoubtedly here first, it won't be far behind. And it will change things far more.'
Some exhibitors didn't anticipate quite such a dizzying pace of change in the future. Werner Schueler, e-business programme manager at Intel, was happy that the PC looked safe from the set-top box for the foreseeable future: 'We are certainly looking at alternatives, but we think over the next couple of years the main device will be the PC. It's the ultimate device. The mobile phone, the Palm Pilot and all these alternative devices will supplement the PC's progression.'
But doesn't it all depend on the application design? According to Schueler, no. 'On a mobile phone or PDA, you don't want to type in things and do transactions and you don't want to watch a video. Alternative devices will be good for picking up urgent email, accessing news and maybe browsing your stock portfolio quickly, but they will still complement the PC.'
Apparently, the reasons for this lie outside technology and well into the territory of ergonomics. Schueler adds: 'Have you used WebTV? The basic problem is that devices fall into two categories - lean back and lean forward. If you have work to do, you want to sit up and get on with it in private. If you're in the lounge, you're sitting back, you're relaxed and you're probably with other people. They won't want to watch you do your work. If you're going to do that, you use the PC in the study.'
Some methods of mixing business and pleasure conflict with some of the most basic dictates of human nature. 'If you're relaxing on the sofa, of course, you could have an infra-red keyboard and lounge around typing, but who's going to do that? People have two modes and the latest consumer devices are all for use in lounging mode. PCs will remain the tool of choice for work.'
C&W agrees that PC buyers and customers for the TV-based services will remain distinct markets. The representative says: 'What we expect is that people new to the Web will continue to be spoon-fed, as they are with TV. The leading-edge home office users, who are beginning to buy home networking equipment, will continue to require a greater array of services and technology.'
But entering a market born in turmoil can be risky. For one, it's hard to work out whose toes you're treading on until they've squealed. This merely makes C&W more interested: 'The really exciting stuff will happen next year, when we'll be providing 3D games similar to consoles.' Just as the games giants will be providing Web access from their consoles, it seems.
Sega, for one, plans to put a modem in its Dreamcast console and has struck a free internet access deal for Dreamcast users with ICL and BT.
Big players with big bucks - a threat, surely? 'Exactly,' concurs Scott.
'But we knew that.'
Presumably, the huge market growth anticipated will provide enough to go around, as in the case of the mobile phone companies. But what does the C&W foray into multimedia applications to the home mean for the consumer PC market? Gaming and surfing the Web are among the biggest applications for home users, so will consumers who were considering buying a PC but haven't bought one yet stay away? 'I don't think this is the end of the consumer PC market. What we'll be providing is for a living room environment rather than the study environment and it's the consumer end of the market that will be buoyant,' says the C&W representative.
He adds: 'There will be an incentive for existing PC users to join the service from next year, too - blindingly fast Web access through the cable modem for their PC. By taking the lead with the set-top box next year, we hope to pull in PC owners by offering and standalone cable services at a flat rate.' That will surprise a few ISPs. With C&W's own ISP efforts failing to set the world on fire, is it striking back? 'We're still deciding when to offer it, because it's not as big a slice of the pie as interactive TV.'
The battle is on, whether it is a Microsoft and AT&T alliance or even a Microsoft with C&W tie-up that will end up dominating the market. And if you listen to the latest rumour, it is Microsoft with Deutsche Telekom - there has been speculation that the software giant is looking to take a stake in the telecoms company.
Steve Ballmer, president of Microsoft, has done his best to pour cold water on the rumours of Microsoft's involvement with cable companies.
This month, he was quoted as saying: 'If Microsoft wanted to buy a UK cable company, it would have done so by now.' He also insists that Microsoft does not want to buy a cable company at all. However, since Microsoft's deal with AT&T guarantees the inclusion of its own Windows CE software in cable TV sets, does it really need the cable companies?
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