Underlining its mainstream aspirations, eMachines CEO Stephen Dukker said Monday the MSN Companion -- developed in conjunction with Microsoft (msft) -- will be available at Circuit City, Wal-Mart, and Office Depot stores, as well as e-tailers MicroWarehouse, Micro Center, and Cyberian (cool).
The MSN Companion comes with a 200MHz National Semiconductor Geode processor, 32MB of SDRAM, 16MB of flash memory, 1MB of shared video memory, a 56K V.90 modem, built-in speaker and two USB ports. It runs on the Microsoft Windows CE operating system and includes Internet Explorer and such MSN services as e-mail, instant messaging and chat, shopping, and financial management. The appliance's software will be periodically upgraded via the Internet.
If users agree to sign up for a three-year subscription to MSN, they will receive a $400 rebate. The monthly fee for the ISP service is $21.95.
Dukker said eMachines (eeee) won't just be making MSN appliances, though.
America Online and eMachines have a strategic partnership and, according to Dukker, the PC maker will have a device using the AOL platform once the AOL platform is ready. Dukker said the company went with MSN Companion first because the MSN platform was ready first.
"In this space, we are committed to all platforms," said Dukker.
eMachines, the No. 3 desktop manufacturer in the United States with more than three million PC shipments to its credit, is just the latest PC maker to stake its claim on the Internet appliance market.
Several other leading PC manufacturers have already announced plans to jump into Internet appliances. Compaq (cpq) currently has the iPaq Home Internet Appliance, another unit developed in conjunction with MSN, available in retail stores and Gateway (gtw) is working with AOL (aol) to release appliances by the end of the year.
Internet appliance maker Vestel also has an MSN-based unit called the Vestel Internet Terminal, which is currently available. Under a promotion, the device costs $99 until supplies last. The company would not release how many units were in supply. The MSN service costs $260 for one year, which must be prepaid.
Manufacturers have been clamoring into this market as analysts have been foretelling a slump in the growth of PCs. Recently that tune has changed as second quarter results from International Data Corp. have indicated a surge in demand from the U.S. and Japan.
IDC foresees the market for Internet appliances growing to 89 million units or $17.8 billion by 2004. But most of that growth is expected to come from devices, such as set top boxes and gaming consoles, where Internet access can complement activities that users are already accustomed to.
"The market needs to be explored and better defined. We need to understand how different people want to get on the Internet and what types of devices they want if we are going to continue to push Internet-centric communications," Dukker said.
IDC analyst Bryan Ma said the fact that the MSN Companion comes without a monitor is the unit's defining characteristic. Most others announced appliances come with expensive LCDs.
"eMachines is definitely competing for the low end. Flat panels are expensive components. But by not including one, the drawback is that the device is less sexy," said Ma.
Another chief concern surrounding subscription-based Internet appliances with hefty rebates is whether or not consumers will be able to take advantage of broadband access when it becomes more readily available.
Sources have said that broadband capabilities would more than likely be factored into the next version of MSN Companion devices.
