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3Com lets Audrey out the door

The Internet-surfing appliance, which features an 8-inch touch screen, is making its debut online and on the shelves of stores including Bloomingdale's.

By Ian Fried and Melanie Austria Farmer
Staff Writer, CNET News.com

Published: October 17, 2000, 1:05 PM PDT

update 3Com lifted the curtain Tuesday on Audrey, a countertop appliance designed to give gadget-happy families a quick way to surf the Web and shoot off email.

As previously reported by CNET News.com, the Net appliance with an 8-inch touch screen is the first in a family of such devices that 3Com dubs Ergo.

The $499 Net appliance offers email access, a calendar, an address book, and a knob for dialing among several preset Web sites. Among the preloaded sites are ABCNews.com, AccuWeather.com, ESPN.com, CBS MarketWatch.com for financial news and Mr. Showbiz for entertainment.

Audrey uses the QNX operating system, mixed with elements of the Palm operating system, allowing the device to sync directly to up to two Palm or Handspring handhelds.

"One way to think of this is the Palm of the home," said Julie Shimer, vice president of 3Com's consumer business. "We want to deliver an enjoyable Internet experience in the nerve center of the home. In most homes, that's the kitchen."

Although Audrey can go in a living room, it is designed with the kitchen in mind. The unit, which comes in colors like linen and sunshine, is somewhat spill-resistant. Its outer case has a finish that can be cleaned with a sponge, although the green, scrubby side should probably be avoided. The touch screen, however, should be cleaned with products aimed at computers.

Analysts praised some of Audrey's innovations but questioned the high price tag.

"They've got the right idea," said Bryan Ma, an analyst with market researcher IDC. "They're going after the early adopters, and it's more than just Web browsing."

However, Dataquest analyst Martin Reynolds said Monday that current Internet appliances cost as much as a cheap PC without offering a compelling reason to buy them.

"The kind of things we're seeing just don't do it yet," he said.

Audrey had several cameos before Tuesday's launch, including a brief, inadvertent appearance on 3Com's Web site. Audrey was originally due out last month, but its arrival was delayed shortly before a planned launch.

Santa Clara, Calif.-based 3Com isn't alone in its efforts to launch Net appliances. Microsoft has its MSN-based Web Companions. America Online and Gateway plan to ship a kitchen countertop unit this year. And Netpliance, Honeywell and others have their own versions of a Web-browsing device.

3Com said Audrey customers can keep their existing Internet service providers and email addresses, or they can set up an account with AT&T WorldNet service.

Audrey is aimed at people who are quick to scoop up the latest technology and who probably already have their own Internet access.

"It would be a barrier to entry for an Internet appliance to require a year or two or three of Internet service," Shimer said.

Audrey owners can type email using a small, infrared keyboard, scribble a hand-written note directly onto Audrey's screen using a stylus, or record a voice message. The appliance is powered by National Semiconductor's Geode processor and comes with a built-in 56K modem and speakers.

People who have a cable modem or a digital subscriber line can use an Audrey-specific Ethernet adapter to tie into the high-speed connection.

Because Audrey can sync with up to two Palm-based handhelds, Ma said, the unit will initially appeal most to Palm or Handspring owners. Future Ergo appliances may support the use of three or more handhelds, Shimer said.

The unit comes in five colors that would make Martha Stewart proud: slate, ocean, sunshine, meadow and linen.

The product can be ordered online beginning Tuesday and will show up on store shelves later this month.

Retailers include the usual suspects such as Best Buy and CompUSA, Shimer said. In a more unusual twist, Shimer said Bloomingdale's will sell it as well.

"They see this market the way we do: Style matters."

Audrey's life cut short

By June, 3Com says it will discontinue Audrey, a Web-surfing appliance released in October, and Kerbango, an Internet radio.

By Michael Kanellos and Wylie Wong
Staff Writer, CNET News.com

Published: March 21, 2001, 10:45 AM PST

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The good die young, and so do Internet appliances.

3Com on Wednesday said it will discontinue Audrey, its Web-surfing appliance, and Kerbango, an Internet radio, by June. 3Com acquired Kerbango, the radio's maker, for $80 million in June.

The company will also likely disband its entire Internet appliance division created last year, although it will continue to make home-networking products. Audrey and Kerbango were the only two products to emerge from the appliance division, a spokeswoman said Wednesday, and no further products are planned. 3Com will also discontinue its Webcam, which comes out of a separate division.

Audrey's quick demise--the $499 device debuted in October--is the latest evidence of a growing trend. Namely, consumers don't want simplified computing devices for surfing the Web, or at least they don't want them yet.

To date, almost all of these devices have failed to take off in the marketplace. Netpliance, a start-up that sold the I-opener Internet terminal, already stopped selling the product itself and announced mass layoffs in February.

Earlier this month, Gateway said it was reevaluating its plans to come out with a Web tablet, a portable device that connects wirelessly to the Internet. Currently, Gateway markets an Internet terminal similar to Audrey called the Touch Pad.

"While we believe in the potential of the category, it's clear that it will take longer to develop than originally planned and likely to generate losses for the foreseeable future," 3Com Chief Executive Bruce Claflin said in a conference call.

Intel and Compaq Computer have marketed Internet terminals as well, but sales have been fairly limited, analysts have said. Although all of these devices differ, they generally follow a similar design. They are small, can boot up more quickly than a PC and contain a few basic applications.

Microsoft's WebTV is probably the most successful non-PC Internet device released yet, but subscribers for that service hit a plateau at around 1 million. With its new UltimateTV service, Microsoft is de-emphasizing e-mail and Web surfing, instead touting digital program recording.

Still, dreams die hard. Sony plans on coming out with the eVilla, an Internet appliance, in April. Intel has also been touting a Web pad.

Cost has been a major problem for most device engineers. Flat-panel screens and hard drives remain fairly expensive, making it difficult to create a device that costs less than a PC.

"The companies are not seeing the adoption rates that they hoped for a year ago," said The Yankee Group analyst Milosz Skrzypczak. "What is a big deal is reducing the costs to a point where the price is attractive to consumers. The Audrey was between $400 and $600. The value proposition is just not there. It costs more than an Emachine sitting next to it."

Gateway and others have predicted that these devices will catch on when home broadband connections become more prevalent. At that point, consumers might want to buy the devices as a second Internet access point. However, broadband in the home is still limited, Skrzypczak said.

The Yankee Group estimates that by 2005, 30 million U.S. households will have high-speed Net access via cable, DSL (digital subscriber line), satellite or fixed wireless.

Once that happens, Skrzypczak said, "it gives you a nice addressable market for these devices."

3Com wasn't shy about advertising Audrey. The company placed ads in a number of magazines and featured it in television slots. 3Com sold Audrey directly, but was also signing up retail partners.

Audrey could be placed in a number of rooms, but it was designed with the kitchen in mind. Its outer case had a finish that could be cleaned with a sponge. The device came in five colors that would make Martha Stewart proud: slate, ocean, sunshine, meadow and linen.

3Com's decision to send Audrey to the glue factory comes amid a broad slowdown in technology purchasing. The company will also streamline its structure. In total, 3Com hopes to cut $1 billion out of its operating costs by the end of the company's coming fiscal year, which will end in May 2002.

"The abruptness and severity of the current technology slowdown has clearly impacted 3Com," Claflin said in a statement.

In a bit of deja vu, IDC analyst Bryan Ma earlier this month said, "I certainly wouldn't be surprised to see…companies exiting the (Internet appliance) business or divisions within large companies exiting the business."

Then there was the "Audrey." 3Com Corp.'s Audrey was one of several so-called "Internet appliances," or stripped-down PCs intended for email, Web access and calendars.

3Com's Audrey aimed to bring Web surfing to the kitchen.

These terminals -- similar products were released by Gateway Inc. and Compaq Computer Corp. -- were marketed toward what the companies believed were technology-shy users, namely senior citizens and housewives. The gadgets promised simple setups, and powered up quickly, without the lengthy boot times required by a full-fledged computer.

The Audrey, released in late 2000, was a futuristic looking nine-by-twelve-inch box with a touch screen and clear stylus; the stylus would blink with a green light when new email was waiting. It retailed for $499.

But users still had to go through the hassle of dealing with an Internet service provider in order to get the gadget online, which added to the cost and made the Audrey more complicated. Also, as prices on traditional computers plummeted, it was hard to justify spending $500 on a stand-alone Internet device.

3Com discontinued the Audrey in March 2001 after sales lagged behind expectations. The device, however, can still be found on eBay auctions and has been embraced by hackers who reprogrammed Audrey to play MP3 files, display photos and control household lights and appliances.

Still be sold in eBay. See this link: http://cgi.ebay.com/3COM-Audrey-Internet-Appliance-Like-New-in-Box_W0QQitemZ200046566269QQihZ010QQcategoryZ177QQssPageNameZWDVWQQrdZ1QQcmdZViewItem