Mattel goes digital

National | Computers as toys, a good idea gone bad, and the latest, greatest, fastest microprocessor-for now

Issue: "The first straw," Aug. 28, 1999

Binary barbie
Scoot over, Bill Gates. Here comes Barbie. Toy-making giant Mattel inked a deal to sell Barbie and Hot Wheels computers. Instead of the usual beige box, kids can have a $599 machine with the brightly colored look of the company's cash cow product lines. So instead of putting a computer into a toy, why not make a computer into a toy? After all, millions of computers are brought into homes anyway, so why not add a little pizzazz? Mattel hopes kids will want one of these thrown in with their school supplies. The Barbie PC, like the iMac and Flintstones vitamins, is an example of boutique marketing: Take an ordinary product, add something cool, and give it a new ad campaign. For about $600, these machines include a monitor, a pile of software, and the PC running on a 333 MHz Celeron processor. That's fine for doing homework and surfing the net, although a kid may complain if he wants to play a lot of video games on it. The Barbie and Hot Wheels PCs are possible because computer prices are falling through the floor. Almost 71 percent of all PCs purchased retail in June sold for under $1,000, compared with 46 percent of sales in the same month a year ago, according to the PC Data ranking service. Instead of Cadillacs and BMWs, computer shoppers are turning to the computer equivalent of Geos and Saturns. Often people buy second and third machines, maybe so Mom, Dad, and Junior can check their e-mail at the same time. While its software sales are strong, Mattel hopes its new computers will help it grab a piece of the fast-expanding cheap PC market. Yet a Hot Wheels PC raises a few questions. Say the computer is bought for an older child; when the magic day comes when toy cars are put away for good, will Junior feel embarrassed about having the branded computer in his room? Please deposit $9
Here's a cool, futuristic gadget: a satellite-based mobile phone network that lets people talk from anywhere on the planet, from Rockwall, Texas, to London Bridge to the Sahara desert. A company called Iridium thought it was starting a revolution when it launched such a service last year. Too bad it flopped. The Motorola offspring Iridium is one of the great technology failures of the decade. Last week, the upstart announced it was restructuring a whopping $3 billion debt load under Chapter 11 of the federal bankruptcy code. Four months ago, the company reported it had only signed up 10,000 subscribers since launching in November. That's only a fraction of what analysts say the company needed to stay afloat. So what's the problem? How could something so practical and global fail? Customers found Iridium phones too bulky and too expensive. People used to tiny, cheap PCS phones received a rude awakening upon seeing the big, clunky, confusing satellite phones that carried a $3,500 price tag. Calls cost as much as $9 a minute, making almost any other option seem like a better deal. The idea isn't dead, however. Motorola announced it would keep the system running while the company reorganizes. Since Iridium uses 66 satellites to bounce calls around, it is almost too big to die. Still, Iridium's problems showcase a classic problem with new inventions: When they first appear, they are too expensive and too difficult to use. The early computers that helped Microsoft launch had no monitors or keyboards. The first VCRs were monstrosities. Compuserve and America Online were ugly and user-unfriendly during their early days. Eventually, somebody will succeed with global phone technology-a competitor named Globalstar is in the works. Iridium is good idea, but like many others, it must prove that its features outweigh the initial investment. What's after the Athlon? The Decathlon?
Every few months, newer, faster microchips hit the market, upping the ante on PC power and making your computer that much closer to obsolescence. The latest comes from Advanced Micro Devices, Intel's lone surviving competitor. Named Athlon, the new chip runs at 650 megahertz-that's 50 MHz more than Intel's best Pentium III. The Arizona consulting firm Mercury Research claims Athlon performs up to 14 percent better. But these chips aren't cheap. They run about $849 wholesale, but their arrival drives the cost of every other chip down. At first Athlons will appear in personal computers priced between $1,500 and $2,500. Soon Intel will come out with its own faster chip. Soon even faster ones will appear and Athlon will be left in the dust. Ever-faster chips are a basic part of the computer world. Any computer you buy today will be functionally obsolete in about three years, requiring the purchase of a new machine that runs the current software. It isn't fair, but it's Moore's Law: Computer speeds double and prices halve every 18 months. That means chip and software development never stops, with endless new versions always around the corner. The constant flow of technology makes people hungrier for more and better all the time. So the upgrades keep flowing. Also, more power means more memory and disk space are added to computers. This allows programmers to write bloatware: huge, expensive programs that confuse users and run slowly even on super-duper machines. The problem with this phenomenon is that people's speed needs have changed. More people could live with a slower processor as long as they can have a faster Internet connection. No amount of hardware can make that same 56K modem work any faster.

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