Any new technology (and any new way of applying existing technology) goes through several phases: invisibility, hype, backlash, and incorporation. Currently, Internet appliances are firmly in the hype stage, and their manufacturers have the marketing tactics to prove it. Larry Ellison’s startup, New Internet Computer Company (NICC), usually sells its New Internet Computers (NICs) for $199 (a 15" monitor is an additional $129), but after Ellison signed 10 of them, they fetched $1650 a pop at Amazon.com's auction site on July 10. In other weird Internet appliance news, Netpliance recently quadrupled the price of its device, i-Opener, hiking it from $99 to $399 and adding a $21.95 monthly Internet service fee. And, although the company is taking orders for the device, customers won’t see the units until October. That’s confidence: Sell a device for lots more money than the pilot price, then delay shipping by 4 months. (Hey, it works for Microsoft. Of course, it helps if you already have name recognition.)

Ignore the hype and the marketing push. Internet appliances are in many ways just Windows terminals for consumers.

The devices are subject to the same criticisms that Windows terminals face—in particular, the favorite: Why spend this kind of money for a limited device when you can get a PC? It’s a good question. The functionality you get with an Internet appliance depends heavily on the device itself. Netpliance’s i-Opener is very limited. You get no network support, no preinstalled ICA client (so you can’t even run published Web applications), and no support for connections faster than 56Kbps. The NIC, on the other hand, uses the Linux GUI (which looks like a misguided attempt to imitate Windows 95—or the Macintosh user interface if you’re a Mac user), but otherwise has a lot of potential. It has a 10Base-T card installed, so it supports shared access to a cable modem or Digital Subscriber Line (DSL). NICC planned ahead and preinstalled an ICA client in the device, so device subscribers can access published applications from a terminal server. However, with either device, what you see is what you get: You can’t install plug-ins or ActiveX controls without a hard disk, and printer driver support is very limited. Citrix says that we might be able to install the ICA client into flash memory some day, but consumers can’t presently do this themselves.

On the bright side, what’s true of Windows terminals is true of Internet appliances: With no hard disk and no ability to load local applications, you won't have viruses, misconfigured applications, or hard disks that fall down and can’t get up. The terminal server might have problems, but a working Windows terminal should keep working, barring physical problems (e.g., if you pour a soda into a terminal, Bad Things will happen—hard disk or no hard disk).

The acceptance of Internet appliances is closely tied to the acceptance of consumer-oriented application service providers (ASPs). I blow hot and cold on the viability of consumer-based ASPs. I don’t expect many PC users to voluntarily cede control of their applications and data to depend on an Internet connection to get to either one. For advanced computer users, ASPs' greatest potential is supplying applications that the users can’t get otherwise (e.g., online application training—I see a lot of potential there) or use only rarely (e.g., tax software). For less-computer-savvy people, however, Internet appliances and consumer ASPs might well be the way to go. Using an ASP means that you have no applications to install, no viruses to worry about, and no hardware to break. You can't personally misconfigure an application if you didn’t install it or lose your data if you’re paying someone else to back it up. (Yes, these dependencies require trust, but you have to trust the bank that holds your money, too.) And if you use an ASP to get to your applications, it’s true that you don’t need a full-function computer.

The Internet appliance manufacturers must acknowledge that they’re making Windows terminals for the consumer market and tune them accordingly. The devices need better local printer support, locally installed terminal clients, and other features that users should have as they become more accustomed to working on a computer. Internet appliances aren’t just for surfing the Web, they’re for anything you can do over the Internet—including running productivity applications.