The next cheap thing

Making computers cheaper
O.K., so Dukker isn't turning the computer industry on its head just yet. But the role of change agent is one that is familiar to him. In 1998, Dukker's eMachines came roaring out of the gate to log $814 million in sales in its first year by selling nearly marginless machines that forced HP and IBM to get serious about sub-$1,000 PCs. Now that price band makes up more than 80 percent of all home PC sales.

But there are legions of potential customers for whom even today's rock-bottom PC prices are too high. Former eMachines executive Young Song started NComputing (he's now CEO) after discovering that the company was unable to entice some people with $299 machines that had been returned and refurbished. To tap that market, Song says, "I knew we needed a new technology."

He needed a new job, as well. Song left eMachines soon after Dukker was pushed out in 2001, when the company nearly went broke. In 2003, Song connected with co-founder Klaus Maier, who had worked for more than a decade on software that would let you divvy up an operating system and distribute it among many users over the Internet.

By late 2004 they'd converted that software into a cheap chip packaged inside a plastic enclosure with the circuitry to control a mouse, keyboard, and monitor. Thus was born the non-PC. Add in energy savings (the devices consume about 5 percent as much power as a PC) and lower support costs (there's little inside that can break), and you start to see the logic. Dukker will really push his case once NComputing completes a $20 million-plus round of venture financing. Co-founder Song says the goal is to sell one million units by 2008, and not just as PC replacements. NComputing is talking with makers of TVs, cash registers, factory equipment—anything that could benefit from offering a PC-like experience.

Sounds big. But then so did the thin client. And there is one big potential legal obstacle. NComputing's technology in effect lets as many as 30 people use a single copy of Microsoft's Windows. NComputing doesn't resell Windows but leaves it for customers to interpret whether they're covered by their Windows license.

Microsoft Corp. hasn't said exactly how it feels about that yet, but you can imagine the possibilities. There's also the practical consideration of depending on uninterrupted Internet service in the Third World to use one of these devices. Says MIT's Negroponte in an e-mail: "Please remember that in my world, connections are spotty."

(MSNBC.com is a joint venture of Microsoft and NBC Universal News.)

So maybe Dukker's campaign is a bit of a windmill tilt after all.

"There's always been this idea that people have way too much computing power on their desks, but the fact is that people don't want to cede control back to a central authority," says Stephen Baker, a PC analyst for NPD Group. "History tells me this is likely to be a nichey product that doesn't get a lot of traction."

That's not dampening Dukker's spirits at all.

"We are a signpost that there's a new approach that could drive the cost of the client device to nothing," he says. "This could change the world."

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