Oracle’s Ellison To Introduce Low Cost PC

According to published reports, New Internet Company, a San Francisco, California-based company owned by Oracle Chairman Lawrence Ellison, will unveil a new $199 (US$) PC that is designed to do little more than surf the Web and send e-mail.

The new black box will get its first trial run in Dallas, Texas, where Ellison will donate more than 1,000 of the devices to area schools.

Ellison’s Second Attempt

The new desktop device has no hard drive but still has a 266 MHz microprocessor and 64 megabytes of memory. Moreover, its operating system is stored on a CD-ROM, allowing each unit to work independently and be connected to the Internet via a modem or Ethernet network. A monitor is not included in the $199 price, but the company will sell one for $129.

The Linux-based product is the second attempt by Ellison to replace costly PCs with a more affordable version that depends upon the Internet instead of a hard drive. He began pushing the idea in 1996, when he introduced what were then called network computers for about $500.

However, the prices of conventional PCs soon plummeted — thus making Ellison’s simpler systems unattractive. Additionally, at the time, few corporations were willing to give up their existing Microsoft applications for a product based on a proprietary operating system.

This time around, Ellison is betting that the growing popularity of Linux, coupled with a low price point, will be the spark that makes the new unit ignite the marketplace.

Education Market

The company will initially focus on the education market by selling units via its Web site to schools, but company officials say it plans to offer a consumer version later in the year.

Meanwhile, it is also being reported that Ellison’s black box will soon have plenty of competition, as America Online is working in tandem with Gateway, Inc. to bring a similar non-Windows system to market sometime in the near future.

Many analysts have said that e-commerce will reach critical mass only when PCs become as inexpensive as portable TVs. However, some industry observers are now going so far as to say that PCs will soon become a moot point with the proliferation of new handheld wireless devices.

Still, a recent report from research and consulting firm Ovum, titled “Mobile E-Commerce: Market Strategies,” says that consumers may not be willing to pay for services simply because they are wireless.

“It’s debatable whether ordinary consumers are actually demanding mobile e-commerce services right now,” said Jeremy Matthews, Ovum analyst and Asia Pacific mobile specialist. “It’s more a case of suppliers sensing an opportunity to make money, and pushing the idea at them.”

Further, Matthews said that wireless e-commerce is not likely to be a moneymaker in the short term. Consumers will probably lag far behind business users, and even businesses will likely not pay a premium for services that are already available using a telephone or PC.