In-Stat/MDR Reports PC Doldrums Forcing Manufacturers and Microsoft to Look Toward the Non-Traditional.

Business Editors & High-Tech Writers

With the prospect of falling PC prices and revenues due to a slow worldwide economy, a continued decrease in IT spending, and a lag in consumer purchases, PC manufacturers and Microsoft are looking for new ways to expand their markets, according to In-Stat/MDR (http://www.instat.com).

The high-tech market research firm reports that, in an effort to offer non-traditional products that combine the functionality of a PC with the convenience of mobility, PC industry giants are focusing their efforts on products like Tablet PCs, Internet Terminals and Mira Displays, representing a fundamental shift in the way many technology companies approach both the consumer and business segments of the PC market.

"The markets for all three of these products will vary," said Brian O'Rourke, a senior analyst with In-Stat/MDR. "Internet Terminals were once seen as a promising mass consumer application before the product category collapsed in 2001 and those left in this market will now be much less ambitious."

With Tablet PCs and Mira displays, Microsoft is teaming with PC and display manufacturers to emphasize mobility in consumer and business personal computing.

In-Stat/MDR has found that:

-- Internet Terminals reached a low point in 2002, with most of the initial products introduced by the likes of Compaq, Sony, and 3Com, already off the market. Terminals are expected to show modest growth through 2006 by targeting vertical markets, as well as niche business applications.

-- Tablet PCs, which are fully functional PCs in a compact, wireless package, are a promising technology that is coming onto the market at a bad time. IT spending, which rose throughout the late 1990s, has leveled off with the softening economy over the last two years. Over-investment in technology has made the medium to large corporations that are the target markets of Tablet PCs wary of large new IT investments. In addition, the Tablet PC will require the user to transition from keyboarding to pen input, a radical change in the way people work. These factors will lead to slow initial uptake in this market. More rapid growth should come by the 2005-2006 time frame.

-- Mira Displays are an interesting concept that combines the PC with the Web Tablet, allowing consumers to access their PCs via wireless displays. At first these devices will offer little more than Web Tablets. It is not expected that Web browsing, e-mail, and the ability to view PC files will be enough to convince consumers to buy this product. Multimedia applications, such as video streaming, which should be available in the second generation Mira Displays by early 2004, are expected to be the applications which will convince consumers to take a serious look at this product.

The report, "PC Tablets, Internet Terminals & Mira Displays: Beyond the Traditional PC" (#IN020005ID) covers the market for three products that extend beyond the traditional PC: Tablet PCs, Internet Terminals and Mira Displays. The report contains five-year unit and average selling price forecasts for all three product segments.

It also includes profiles of some of the markets' leading players, including Microsoft, Intel, Hewlett-Packard, and Fujitsu. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/cat-iad.htm or contact Courtney McEuen at 480/609-4533; [e-mail]. The report price is $2,995.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products.

This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider.

With over 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.