IMPACT OF MULTIMEDIA & NETWORKS
Final Project

Network Computers and Its Impact on the Japanese Market
November 21

Kensuke Yaegashi

Presentation
1. Introduction
2. NC Reference Profile
3. Who Will Use NC?
4. Benefit of NC
5. Products
6. CSF for Pervasive Usage of NC
7. Impact on the Japanese Market
8. Conclusion

1. Introduction

The reason why I chose this topic is because Network Computers are as easy as playing Nintendo. I love playing video games such as the Nintendo. I used to stay up all night and play because the games were so addictive. Playing with Nintendo is so easy because it is user friendly. It does not require any knowledge about operating systems so people can operate it without reading the instructions. Network Computers have the same easy to operate characteristic.

PCs is the potential competitor of the NCs. The diffusion rate for PC at the office is rapidly increasing but remains low at home. PCs are more complex and thus can do complex tasks. Technological breakthroughs have allowed recent PCs to become more user friendly than in the past, but for most beginners, the PC remains difficult to operate.

There are some advantages the NCs have over PCs. First NCs are simple and relatively easy to operate. The second advantage is that the NCs provide the same applications as the PC. For example it offers applications for a wide range of users in business, educational institutions, consumers and developing countries as well as an access point to the Internet/World Wide Web. If we were to compare a NC with PC, a NC would be a network terminal but with fewer functions. The third advantage is cost. Purchasing and maintenance costs for a NC are likely to be lower than that of a PC. Due to the above advantages, I believe NC will be more popular than PC.

Believing in its market potential, Oracle, Apple Computer, IBM, Netscape and Sun Microsystems set up a standard guideline for NC called the "NC Reference Profile." In addition to this guideline, Oracle independently announced "Oracle NC System Software Suit" and formed Network Computer Inc. to speed up the development of NC applications and server software. Sun Microsystems also announced a Java Station based on the NC Reference Profile.

In Japan, Bandai, Japan Computer Corp., Sega and Hitachi have entered the market by introducing Internet TV adapters which have a World Wide Web browser function. The Internet TV adapter is connected to the television which functions as a monitor. Attached to the adapter is a controller similar to those on a Nintendo which helps you browse through the WWW. Other companies such as Sharp, Mitsubishi Electronics and Sanyo introduced TVs capable of accessing the Internet.

These new devices will significantly affect our lifestyle and thus the remainder of this papers explores the development of the Network Computers and its viability in the future.

2. NC Reference Profile

NC Reference Profile is a guideline for multimedia and Internet devices. This guideline was drafted by Oracle, Apple Computer, IBM, Netscape and Sun Microsystems announced at the NC Reference Profile in May 1996. The reason behind this announcement was to become the new industry leaders in information technology industry replacing the current domination by Wintel - Microsoft and Intel. The purpose of setting the guideline was (1) to set a standard for multimedia and Internet devices and (2) to make them as prevalent as the telephone and the television. NC has the following characteristics:
- Easy to use
- Connects to IP based networks
- End user device
- Exists in a JAVA based programming environment
- Can stand alone, independent on network
- Purchasing cost is lower than PC
- Maintenance cost is lower than PC
- Security function

The Internet TV, which is sold in the Japanese market does not follow a specific standard, and cannot download applications from a server. However, the Internet TV posses many characteristics of a NC. Although there are some differences, in this paper the Internet TV is considered a NC.

3. Who Will Use NC?

The potential market for NCs will probably be a combination of various consumer electronic markets. For the average consumer, the fact that the device is affordable, easily installed and easy access to many different services makes the NC an extremely attractive product. All kinds of people will be potential customers from a computer literate user to a novice who wants an easy way to browse the web and communicate via e-mail to a novice. The fact that NC will be portable and can be plugged into a television in a den, a hotel room, or to a monitor or small television on a desk or a kitchen table, promise quick and easy computing to everyone.

There are potential uses of the NC at the office. NC can perform simple tasks such as working with databases, word processing, spreadsheets while accessing the web and e-mailing. Oracle's market research estimates that in the future the NC may replace up 50 to 70 percent of all the PCs in the office. This is because NCs will be capable for office work. Office NCs will be equipped with larger monitors and more memory than a typical home model. These NCs will cost less than a PC because NCs in the office can be integrated into Internet on existing LANs allowing the coexistence of conventional PCs and NCs on the same network.

In addition, we have to consider about educational institutions. In schools, acquisition costs present the most difficult hurdle to realizing the dream of placing a computer on every student's desk. Many schools are attempting to recycle old PCs for student use, but are hampered by problems of inconsistency, software compatibility, ongoing support, and administrative overhead. Imagine the educational system if every student had a low-cost NC supported by a vast server network. Students and teachers would have access to on-line research and textbooks, up-to-date news information, the Web, and e-mail. The development of more cost-effective wireless transmission methods for feeding the NC to a whole classroom creates all of these extraordinary and exciting possibilities.

4. Benefit of NC

The benefit of NC is that it is trivially easy to distribute and upgrade applications, with the result that every desktop NC is running the same version of the software. In order to minimize the time required to load applications over a network, NC will be able to permanently stage software on local files. At startup, the NC will check to see if a new version of the software has been installed, in which case it will automatically download the most recent version. If the NC is already utilizing the latest, it will revert to the locally stored version.

This difference in perceptive has enormous ramifications. NC greatly simplify the desktop and as consequence significantly reduce the cost and complexity of ownership. As a result, NC will be much easier to organize and maintain, and upgrades will be less costly.

Simplification will come from many directions. Hardware configurations can be as simple as those required to run a basic web browser. A low-end NC can consist of a web browser, a network connection, some memory. Higher end NC might have a built-in display screen, CD-ROM, hard disk, wound capabilities and most of the other functions in todays PC. Using NC will be simple because they will not have to have tremendously complex range of functionality compared to todays PC. This is because the bulk of application deployment and processing will be performed on the server.

Hardware set up will be simplified because of the NC design and mission of the NC. The simpler the mission the easier it is to design and manufacture separate-box solutions. The more open-ended, the solution, the more difficult it is to correctly configure and set up the machine.

Operating systems can also be greatly simplified. Gone will be the days when customers are required to spend an endless amount of time learning about OS. Issues such as initial configuration, tuning, debugging, and endless software installations will become a thing of the past. Customers will not have to call up vendor help desks and be put on hold or put up with busy signals as they try to fix application and hardware conflict problems. Phone calls will not be necessary because there will be no applications that need to be fixed or hardware switches to be set. NC will retrieve applications, content, and services from Internet.

Replacing the operating system will be a Java-like environment. Major new capabilities can be fed to NC via Java applets. Applets, like all Internet applications, are installed, maintained, and upgraded in one location, on the server, but they execute on the desktop NC. NC gain additional functionality not by adding new hardware and installing new software, but by accessing new services on the Internet.

5. Products

NC companies have been recently active. The following is a list moves made by various NC companies.

Oracle
Oracle introduced the Oracle NC System Software SUIT which offers the technical specifications including specifications on the operation system. Other companies requested licenses from Oracle so speed up the standardization of NCs all over the world. Oracle also established Network Computer Inc. which will develop simple and fast NC applications and server software.

Sun Mircrosystems
Sun Microsystems announced JAVA STATIONS in October 1996. The basic model which does not have a hard disk is 742 dollars. Users download word processor, spread sheet and other applications from a server through the network.

IBM
IBM launched its first Network computer, the IBM Network Station in September 1996. IBM also formed a partnership with Network Computing Devices Inc., the world leader in enterprise network computing which has an installed base of more than 300,000 NCs.

Japanese companies
On the other hand, the Japanese companies have started selling Internet access devices which do not meet the NC Reference Profile guideline. Emphasis was placed on user-friendliness when the products were developed. In March 1996, Bandai Digital Entertainment started selling an Internet TV adopter, Pipin @, which has a WWW browser function. Japan Computer Corp. , Sega and Hitachi followed suit. Prices for their products range from 300 to 1000 dollars. In the United States, Sony released WebTV in September. In addition to the Internet TV adopters, Sharp , Mitsubishi Electronics and Sanyo began selling Internet TV in October 1996.

6. Critical Success Factors for Pervasive Usage of NC

NC has the potential to change the way computers are used. To realize this change, companies developing NCs must bear in mind the following critical success factors:

Easy to use
- They must be connected easily to networks with no hassles about protocol.
- Users can operate any applications in conjunction with others without considering obstacles such as differences in OS, configurations and software versions.
- Anyone can operate a NC without reading a long detailed instructions book.

Low initial costs
The initial costs of purchasing and installing NCs must be considerably cheaper than the PC.

Low running cost
The running cost of running NCs on a network must be cheaper than PCs. Also Users can use new versions of application without buying an upgrade version.

Server support through network
- Each server must provide various applications in order to fulfill the requirements of each user. The introduction of JAVA made this possible because JAVA does not really on any computer environment when developing such applications.
- Server must provide an E-mail system.
- Response speed must be fast. This should be much faster than current systems because users will have to download the applications such as word processing programs and spread sheet programs from the server.
- Help desk provides help whenever needed.

7. Impact on the Japanese Market

Even if many of the Japanese own a computer, the number of computers would be less than in the United States. The Japan Information Processing Development Center (JIPDEC) produced a research study in 1995 which compared the information structure in Japan and the United States. This study found that Japan is considerably weak in the following areas: Pervasive usage of PCs, Internet connections, and database development and usage.
- As of 1994, the number of PCs per capita in the United States was about three times greater than in Japan. This figure for 1996 is much smaller since PC shipments over the past two years have increased tremendously.
- As of January 1995, the number of systems connected to the Internet (per capita) in the United States was 15 times greater than in Japan.
- As of March 1995, the number of Internet WWW servers (per capita) in the United States was 13 times greater than in Japan.
- In 1993, the number of database producers per capita in the United States was about five and a half times greater than in Japan. Sales of databases in the US the same year was about two and half times Japans.

The reasons why the Japanese people have these weakness are because there are some obstacles to use computers. The Japanese alphabet is much more complex than the English alphabet. This is because there are lots of characters such as Kanji ( Chinese characters ), Hiragana and Katakana. There are over 3,000 characters in the Japanese alphabet. So inputting Japanese using an English keyboard is very sophisticated and cumbersome. First the individual has to learn how to type with the English keyboard. Then the individual has to learn how to use the program which converts English letters into Hiragana. Then, the individual has to use another program to convert the Hiragana into Kanji (Kanji henkan program). This very tedious task deters the Japanese from using computers. Therefore it must be easy to type Japanese into NC.

The second obstacle is the high telephone costs. In Japan it costs about 10 cents per minute for a local call. Japanese people are aware that communication costs are more expensive than most countries but since there is only one company which provides local call service, there are no competitive forces to drive down the telephone costs. However the increase in the number of users may pressure the company to lower its prices.

If NC satisfies the critical success factors described above, a new market like the Japanese Nintendo game market should develop. As the number of NC users increase, electronic commerce will become common making it more convenient for the user, thus changing the Japanese lifestyle.

8. Conclusion

1. Can a bare bones computer systems such as the NC be a viable tool to attract individuals to the net?
Yes, but it depends on whether the network is inexpensive to access and is easy to access. I suppose that the specification defined in NC Reference Profile fulfills most user requirements because profile emphasize convenience such as compatibility, easy-to-use and lower costs rather than competing with other companies on product specifications.

2. What are the technology issues surrounding the implementation of a NC type of technology?
NC application development, especially, operation systems are important issues because those who are not familiar with computers and networks will be using the NC. When development of NCs should consider those users.

3. What are the other alternative technologies to the NC?
NC will not likely replace the PC, but the PC may replace the NC because installation costs of PC are likely to decrease in the near future. If the NC does not withstand the competition of the PC, then we will have to stick with our PCs.

Links

Oracle Corporation (US)
Oracle Corporation (Japan)
Sun Microsystems
IBM
Apple Computer
Netscape

Bandai
Japan Computer Corp
Sega
Hitachi
Sharp
Mitsubishi Electronics
Sanyo

Notes

1. Halley Porter, Summary of Developments in Electronic Commerce in Japan
2. Oracle Corp., Oracle Network Computer White Paper
3. Richard Finkelstein, Network Computer --- The Birth of a New Industry
4. Sekai-Shuhou, 1996.11.19
5. Nikkei Computer, 1996.11.4
6. Nikkei Business, 1996.11.11

Special thanks to:
Mr. Taiichiro Katoh
Ms. Yumoko Ogawa

Kensuke Yaegashi --- Exchange Student from Japan

last updated Dec. 3