Austin-based Netpliance launched behind that idea, and other companies, including Dell and Compaq, created their own versions. Demand for the devices was weak, however. Dell dropped plans for its machine, 3Com is offering refunds to customers for its device and Netpliance eventually left the business. About 150,000 units were sold in the U.S. in 2000, with projections for 1.2 million units by 2005. Intel and Compaq are the only companies currently pushing their Internet appliances, but Ma said Compaq is the best positioned because of the design of its systems and its alignment with MSN as the Internet service provider.
Many analysts remain skeptical of the Internet appliance market, however.
Compaq's Burke said that ultimately it is the spread of broadband Internet access that will have the most impact on how successful the iPaq product line is. The more that infrastructure can be extended beyond the desktop, the greater the acceptance of these devices. Music to Compaq's ears Compaq is also busy merging PC technology with music. The Music Center looks like a CD player one would find on a home bookshelf stacked between a tape deck and receiver, but it takes the technology a step farther. Equipped with a hard drive to store up to 400 CDs and a modem to hook into an online service to organize the music collection and gather information on the artists and songs, it's one of the first crossover products from the PC industry to the home entertainment field.