Virgin's Net Appliance: It's Clearly Inexperienced

I have seen the future of Internet appliances and it's slow, proprietary, and ponderous.

For the past month I've been playing with the Virginconnect Webplayer, just long enough for first impressions and apprehensions.

As a sucker for anything free, I jumped at Virgin Entertainment Group PLC's Internet appliance giveaway, announced last December. The British music titan announced its partnership with the Internet Appliance Network (IAN) to give away 10,000 Virgin-branded Internet appliances to consumers as a pilot program.

Nine months later, my Virgin Webplayer arrived. The device has a ten-inch LCD monitor, a wireless keyboard, a 56-kbps modem, and a 200-MHz National Semiconductor processor. It's designed exclusively for Web browsing and optimized for shopping at the online Virgin Megastore.

Check Out the Fine Print

Here's the catch. In exchange for the cute little Webplayer and free Internet access I forfeit personal data about where I surf, who I am, and my likes and dislikes. The Faustian bargain also requires that I use the device at least ten hours monthly; if not, I must ante up US$500 for the Webplayer or return it. The device is free for the first year. Then I'm charged $50 annually for two years. After that I own the hardware and can surf for free.

If I'm ever unhappy with the device, I need only pack it up and ship it back to IAN, and I owe nothing. Not a bad guarantee.

Acer cooked up the hardware design, Boundless builds the devices, Merinta provides the software, and Prodigy furnishes the Internet access. And IAN is responsible for customer support and customizing the device's software for clients like Virginconnect.

While this Webplayer is just an early example of these devices, it also represents the Internet appliance's future: a group of companies working as one to offer a service-specific Internet appliance. In this case, the hardware is worth $500, and the challenge is in recouping that cost and making more.

Webplayer's Guided Tours

IAN subsidizes the cost of the hardware in a number of ways. It sells banner advertising. It gets a cut when you buy something online from one of its partners. Currently it does not sell the marketing data it collects from customers, but says it is considering this.

IAN manages all ads on the Webplayer's home page and dictates what you get when you press one of the 18 special keys on the keyboard. For example, press the key with a tiny symbol of a ticket, and you're whisked to Tickets.com. Buy a ticket, and IAN earns money.

This kind of control over the desktop puts you at a disadvantage. Using the service is like being trapped in a Virgin Entertainment theme park where the only things you can buy are at gift shops. IAN made it hard for me to surf anywhere I wanted by dwarfing the navigation buttons on the Webplayer browser with hard-to-miss links to IAN partner sites.

First Impressions: Webplayer Needs Work

Don't get me wrong: I still think the concept behind the device is great. But excitement fades as I discover the device's technical shortcomings.

Disappointment began with slow connection speeds. About 70 percent of the time I tried to connect to the Web I had trouble logging on. Sometimes Web pages took nearly 10 minutes to load.

Prodigy, responsible for connectivity, says slow and failed connections have less to do with its network and more to do with compatibility between the appliance's modem and the Prodigy modems I dial into.

Worse, Bill Kirkner, Prodigy's chief technology officer, tells me that updating software on any appliance with a "nonstandard operating system and nonstandard hardware is a very tricky proposition."

For IAN's part, it says software and hardware are simpatico with Prodigy. As a customer of the service, I'm confused. Granted, the device costs nothing--but connectivity headaches are taxing.

Another proprietary pain is dealing with Web content that is incompatible with the Webplayer. Attempts to run Java applications such as simple online games, Shockwave content, streaming video, and Windows Media audio all produced the same "Unsupported Content" error message.

A Sour Note With Music Fans

If you like digital music--a demographic Virginconnect hopes to attract--you can forget about listening to or saving music using this device.

Support for streaming audio, in my experience, was severely hampered by hardware limitations and bandwidth issues. As a Virginconnect technical support technician explained it, because the unit's 32MB of flash memory is dedicated to caching Web pages and running software, not enough is left to support applications for listening to Web-based radio stations.

I did, however, find limited success streaming audio. However, the sound quality of the speakers was about as good scratchy AM radio.

Don't even think about installing music-sharing programs like Napster, and you can skip downloading MP3s or any digital music. The device has no hard drive.

IAN Will Survive

The Webplayer is one of the first of its kind in what is expected to be a very crowded arena by year's end.

Half a million such appliances will ship by the end of 2000, predicts market research firm GartnerGroup. Experts anticipate approximately 20 companies will roll out appliances this year, ranging from America Online and IBM to monitor maker ViewSonic.

Only a handful of appliance makers will follow Virginconnect's gutsy free model, in which low-cost hardware is subsidized by ads and revenue splits with e-commerce partners. Most Internet appliances will require you to be a paying subscriber to their proprietary Internet service and only partially subsidize the appliances with ads.

Researchers at IDC forecast 1.5 million Internet appliances will ship by 2002. How many appliance makers can survive a market that size is anyone's guess.

IAN makes no apologies for its choppy maiden voyage into the uncharted waters of Internet appliances. It says it has received positive feedback from customers, and it reports returns of only 400 Webplayers of the 10,000 distributed. And it's not wasting any time, already preparing its next appliance--a wireless Web-tablet designed for simple Internet access.

I just hope Internet appliance makers play close attention making devices as useful as they are profitable.

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