Message: 25
Date: 7.1.95
From: <nicholas@media.mit.edu>
To: <lr@wired.com>

Affordable Computing

Andy makes my computer faster. Bill uses more of it. Andy makes my computer yet faster and Bill uses yet more of it. Andy makes more; Bill uses more. What do you and I get when Intel and Microsoft keep adding and taking? Almost nothing. My computer takes forever to start up. Loading my word processor is interminable. Each new release of an application is festooned with gratuitous options and an army of tiny icons the meanings of which I no longer remember.

We've all heard that an application program exposes only the tip of its iceberg. Well, I normally use only the tip! My old Mac 512K went "boing" and was on. I still run Microsoft Word 4.0 (and would run Word 2.0 if I could) because it's fast and simple. The last six years of advances in personal computing have resulted in diminishing returns when one considers the performance we see.

According to Moore's law (Gordon Moore is Andy Grove's partner and mentor and the co-founder of Intel), since I installed Word 4.0 six years ago, my system should now be running 16 times faster - not slower. My lament is, Why can't my system run at the same apparent speed it did six years ago and cost 16 times less?

What's going on? Simple. First, the cost of personal computers is held artificially at US$1,500 (give or take $500), because the current market can bear this amount, and it provides a suitable profit margins for manufacturers. Second, software is growing far too complex (featuritis), so clean, simple systems are almost extinct. Third, it has been historically difficult for American technology companies to be in the commodity business and sell 10 million computers at $150 instead of 1 million at $1,500.

Software and hardware companies can get away with the $1,500 price tag when their primary customers are other businesses. But now that the home is the fastest-growing market, they've got to think about you as the customer - and this is an entirely different game. Don't let anyone tell you that a $1,500 price tag is endemic because computers are just plain expensive. Do you need proof that they can be cheap(er)?

Nintendo has released a 20-MHz, 32-bit RISC machine called the Virtual Boy (what an awful name) that includes extraordinary 3-D graphics and stereo sound; two built-in displays with four levels of gray; and a novel, two-hand game controller. Its retail price is $199, and it comes with one game cartridge. This product arrives at a time when the yen is below 85 to the dollar. Nintendo is not losing money on the razor to sell the blades.

Why not take that kind of power and build it into a more general-purpose - but stripped-down - machine, with Netscape or Mosaic built in, that everyone can afford? Congress worries about the information-rich versus the information-poor, but most of its members probably don't realize that computers can cost less than bicycles.

Running Moore's law in reverse
In 1976, I had a CRT terminal, the Fox, made by Perkin Elmer (formerly in the business). The Fox had a small footprint, compact display, and minimal but adequate keyboard.

It cost $200. According to Moore's law, the achievable complexity of an integrated circuit doubles every 18 months. If I correlate complexity with dollars, $200 of 1976 Fox should be worth about $1 million of computer today. So, for one five-thousandth of that amount, why can't I get what I had in the Fox, plus color and local computing?

The answer is, I can. Manufacturers just need to be pushed into this commodity business so that every school and low-income household can own a computer. This can be achieved without subsidies by trimming the fat from today's PCs and making some bare-bones engines that word process, telecommunicate, and provide access to online services. Use a modest color display: a 13-inch window into the Net is better than no window at all. People are always amazed by the amount of daylight let into a dark room by a small hole (witness the Pantheon in Rome). It's the same on the Net.

Advertiser-supported computing

But even $200 may not be low enough. Or, manufacturers may say, Fine, but give me an order for 10 million, then I'll build it for you. OK. Here's an idea for how such a notion can be achieved, getting both the order for 10 million and reducing the price to zero (or lower). Listen carefully, AOL.

Today, there are more than 100 million computer screens in the United States. Think of every screen as a potential billboard. Let's assume that each one is turned on once a day and, lo and behold, each day a new advertising message appears - the screen saver for the day. That message could be targeted to specific users. No sense showing me an ad for Bourbon if I don't drink hard liquor or a commercial for Geritol if I'm 6 years old.

Manufacturer X (the one taking the order for 10 million machines from AOL) would probably have to build a small RF receiver so it could load these machines with personalized commercials but without requiring the user to log in or pay for connection time. This could be done, for example, through terrestrial broadcasts using the likes of Mobile Telecommunications's SkyTel.

There are several ways to implement this and more ways to make the business model attractive to vendors (and the computer more or less free). Advertisers would pay to gain access to what turns out to be about 2,000 acres of advertising space (changeable per square inch, per day, or per hour). That money could subsidize the cost of the computer and even pay for you to use it.

Will this really work? Yes. Of course, many details need to be resolved. My point is not this specific example, but the need for some creative thinking about how to make and price PCs. I am no great fan of advertising, but it does represent a quarter-of-a-trillion-dollar industry, and there must be a way to use its size to make computing affordable to all Americans.

So, step one is to get Andy and Bill to stop scratching each other's backs, and step two is to find new business models to make low-cost PCs available to consumers through the intelligent use of advertising. Come on, boys.

Next Issue: PC Outboxes TV

[Back to the Index of WIRED Articles | Back to Nicholas Negroponte's Home Page | Back to Media Lab Home Page]
[Previous | Next]

[Copyright 1995, WIRED Ventures Ltd. All Rights Reserved. Issue 3.07 July 1995.]