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What happened to the PCs at PC Expo?

They're still there -- but suddenly the personal computing world is becoming much more than stand-alone computers. Here's why.
Written by John G. Spooner, Contributor
NEW YORK -- Reports of the death of the personal computer at PC Expo this week have, as usual, been greatly exaggerated. Despite the rise of new technologies, including wireless PDAs, Internet appliances and smart phones, the PC will remain, in the foreseeable future, at the center of the computing universe.

But that doesn't mean its role is not changing.

In fact, this year's PC Expo marks the beginning of what will become a shift in the way PC makers talk about the desktop computer. No longer is the desktop PC a stand-alone device.

"I think the speeds-and-feeds era is over. It's about the overall user experience now," said Carl Everett, senior vice president for Dell's Personal Systems Group.

Even processor brands, such as Intel (intc) and Advanced Micro Devices (amd), that consumers trust when they buy new computers will become less important over time, he said.

"The real issue is what you build around (the PC) that makes the experience."

Most of the top PC makers, Dell (dell) included, are now looking at the PC as the center of a bundle of hardware that include cell phones, pagers, personal digital assistants, as well as software and services that can be provided to customers. The bundle can be customized to fit the needs of consumers, small businesses and larger corporations.

Many of these packages will be delivered to business customers first. However, this sales strategy will expand over time to deliver similar bundles to consumers.

Executives from Dell, IBM, Compaq and other PC makers interviewed at the show indicated plans to begin delivering similar PC bundles.

"I think that model is emerging. (For consumers) it's a matter of getting broadband ... in place," said Ed Petrozelli, vice president of marketing for desktop and net devices at IBM's (ibm) Personal Systems Group. For businesses, "I think that it's a matter of getting the right applications and the right alliances in place."

Customized services, he said, are six months to one year away from being "a big hit."

Compaq (cpq) is working to offer services such as custom-configured PCs that ship the next day after an order is placed.

However, the company recognizes, "There isn't a customer today that buys just a PC," said Kyle Ranson, vice president and general manager of Compaq's Transactional Business Segment. "They buy the PC and all the stuff that goes with it."

It's this "stuff" that has PC makers working to change the way they do business with customers.

Dell believes that broadband Internet access in combination with home networking technology, especially wireless, will be one of the biggest catalysts in changing the way consumers use PCs.

Wireless "allows the computer to organize itself around the person," instead of that person organizing him or herself around the PC, Everett said.

The mobility provided by notebook PCs will also act as an agent of change. Dell's Everett believes many companies will begin outfitting employees with mobile notebook PCs that can also be used at home for Web surfing or connecting to the corporate network via a virtual private network -- all via a wireless home network and broadband Internet connection resident on a desktop PC.

Networked computing appliances, which rely on the PC as an Internet gateway, and cellular phones with Internet access capabilities, will also play a role here, numerous PC maker executives said.

It is this "gateway" role that PC makers see the consumer desktop PC playing in the not-too-distant future. It will, in practice, no longer be a desktop PC. Instead, the PC will be out of sight, acting as a gateway for broadband Internet and a server for files, such as MP3 music, all of which it serves up via a home network that is wired throughout a house or one that is enabled by wireless networking hardware.

Floating around this home server will be a number of devices. One such device will be a notebook PC, which will likely be connected wirelessly. But there will also be a multitude of networked appliances that call the PC server as well.

Dell showed off one such device at PC Expo: The Dell Digital Audio Receiver, a network appliance for accessing and playing MP3 or Windows Media Audio Files from a remote PC on a home stereo. Available in August, it will cost about $249 when purchased as a stand-alone product, less when purchased with a PC.

Dell officials said similar appliances for video would make sense as well.

For business, PCs will continue to play an important, although now much more mobile, role.

Officials at Dell, NEC Corp. (nipny) and Hewlett-Packard Co. (hwp) said they plan to equip notebooks with either local-area or wide-area wireless hardware in the future.

Dell this fall will begin to equip each of its notebooks with an antenna for 802.11 local-area networking. The user can then just pop in a wireless networking card to establish a network connection. Over time, Dell officials said, the company is likely to start building local-area wireless networking abilities into the PC itself, as many PC makers have done with analog modems.

Companies will be just as flexible providing services around the PC. "There is no one-size-fits-all," said Steve Yon, director of marketing for Dell's Optiplex line of business. "We're a distribution channel to allow you to tune your business the way you want to tune it."

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