Can Compaq's iPaq Thrive?

NEW YORK -- When Compaq unveils a new line of consumer and business computing devices, you might assume that at least some would be PCs. But new PCs were nowhere to be found at Compaq's iPaq product launch here this week. Instead, the company's introduction of an array of nontraditional computing devices is apparently the start of a growing line of products aimed at both home users and corporations.

The new products, including an MP3 player, wireless handhelds, a Web appliance, and a home Internet gateway, join Compaq's Pocket PC, introduced this spring. (See "Compaq Expands iPaq Family.") All will be marketed under the company's iPaq sub-brand, first used earlier this year for the company's slim-line, legacy-free business PC. (See "Compaq's iPaq Leads Net-Centric Strategy.")

The New York event was rife with the requisite hoopla of a major announcement: Giant monitors showed clips of consumers using the new products, including an apron-wearing grandma using the Web appliance in her kitchen to trade recipes with friends. (For as long as manufacturers have been trying to jump-start the market for Web appliances, they've been mentioning this grandma, or someone very much like her.) Corporate executives engaged in scripted banter about the new products; the audio player introduced itself by reading a short speech in a feminine voice, and a real live hacker crouched before a notebook, purportedly attempting to break into a home network protected by the iPaq Connection Point gateway.

Eying the Non-PC Surfers

Why the ambitious move into nontraditional computing devices? Compaq points to a recent Forrester Research prediction that by 2003, 45 percent of online users in the United States will use more than one device to connect to the Net. Compaq thinks many of those devices won't be PCs--hence the iPaq line. The company expects to continuously expand its iPaq family to include new types of computing products.

While the iPaq line is clearly a departure for a company that built its business on mainstream PCs, it's not quite the radical move that it might seem. Compaq is quick to point out that there's a PC angle to all its new products. The audio player needs a PC to get its tunes, for instance, and the wireless handhelds grab e-mail from your desktop PC's in-box. The company even expects the iPaq Home Internet Appliance will offer an introduction to the Web for recipe-swapping grandmas--and as a "second PC" in households that are already online.