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  • From: "Michael D. Thomas" <mdthomas AT mindspring.com>
  • To: "InterNetWorkers" <internetworkers AT franklin.oit.unc.edu>
  • Subject: Re: Linux, AOL/TimeWarner, and the future of computing
  • Date: Tue, 26 Mar 2002 01:39:05 -0500


> I'll have to check with my sister-in-law, who uses the service...I'll get
> back to the list with some details.

I'd be interested in know the following about email/web-over-tv:

* How many emails per day to people get;
* Are they finding that the web sites they wish to visit are low-res enabled;
* Generally, how does lower resolution affect the overall experience;

> Many Americans
> would be completely turned off by the lingo and pictures that really work in
> Italy and even Britain. I mean, do you think Page 3 girls would work here?

I think they'd work for me.:-)

What I'm more interested in is really at an anthropological level. For
instance, I don't think anyone would disagree that television has had a
profound impact on American culture. The Internet has too. My question: how
would a low-res Internet differ in its impact from our high-res Internet? How
does the Japanese lack of personal space change the impact of the Internet on
Japanese culture (this is the explanation that I've heard for why the Japanese
access the Internet mostly over I-mode cell phones -- they simply don't have
the room for PCs)? For instance, the I-mode Internet isn't as "big" as our
high-res Internet, but the Japanese always have the I-mode Internet with them.

> I'm a big fan of the internet appliance...

I am too, as is Larry Ellison. He's been trying to sell the idea since 1996
when I worked at Oracle. The rather complete failure of his efforts is
pertinent to this conversation. I can think of 4 analyses of the history of
the Network Computer that pertain:

* The Network Computer was a good strategy but there were tactical mistakes;
* The Network Computer was a horrible strategy and the market has proven that;
* The Network Computer was years ahead of its time and we'll soon label Larry
an genius as he starts selling gazillions of them;
* The Network Computer was a good strategy but Oracle/Larry isn't positioned
to implement the strategy. (Parallel: it doesn't matter how great my strategy
for creating peace in the Middle East is, I'm in no position to implement it.)

I think the first and fourth points are most valid. The early Network
Computers had no hard drives and depended too much on Java. They had to have
way too much processor, way too much memory, and way too much bandwidth. This
drove the cost up to be comparable with a PC, but without the benefits of a
PC.

Per the fourth point: Cheap machines carry low margins for everyone in the
distribution channel, including the manufacturers. There are also huge
economies of scale that need to be acheived to reach the necessary production
volumes and cover the sales/marketing expenses. There has to be a carrot, and
the carrot is recurring revenue -- i.e., monthly subscriptions.

The telecoms already played this strategy with cell phones. They were more
than happy to loose money on the hardware in order to get consumers hooked.
And it's not just that they got people to sign service contracts -- it's that
cell phones become part of the consumer's life and something that was
considered indispensible when the contract was up.

A similar strategy could work with Internet appliances, but it is the telcos
(e.g., AOL/TimeWarner's) card to play.

This all assumes that there are people out there that won't become members of
the High-Res Internet as long as the initial membership fee is >$1000.




















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