Australia-based Internet service provider Eisa.com will start shipping in June a $99 combination DVD movie player and Internet set-top device called the Neo iDVD.
The low initial cost of the Neo iDVD is subsidized with a two-year contract that charges customers a $23.95 per month ISP fee for web access through Eisa.com, said Eisa CEO Campbell Angus.
The company will only sell the iDVD in this manner and has not set up a system where the consumer could lay out all the money up front and not pay the monthly fee.
The initial U.S. launch partners are CompUSA and RadioShack. The company is targeting a wide spectrum of customers, but Angus said women, who now comprise a large share of those buying online, and families financially unable to lay out the money for a PC would be prime candidates.
Angus also feels there is a technological stigma attached to PCs -- primarily that they are too hard to operate and install -- which will keep a large number of people from ever buying one. The simplicity of the iDVD device and the added value of the DVD playback will attract these customers.
"We are hoping this product will help cross the digital divide that separates those who have web access from those without," he said.
Eisa is anticipating that the iDVD will quickly take off, with anywhere between 500,000 and 1 million units shipped this year. Eisa is outsourcing the manufacturing.
The iDVD features DTS and Dolby Digital surround sound, optical audio output, onscreen menus, and parental controls to keep children away from inappropriate websites.
Eisa will roll out an updated version of the device by the end of 2000 that will include broadband functionality, USB ports enabling the use of peripherals, and some networking capability
The company is also looking at the handheld market and is putting plans in place to market a Palm-type product, also by the end of the year.