Apple’s iMac G5 is a new type of computer. The entire computer is in

the flat-screen monitor box…including CPU, memory, CD/DVD drive and a wireless Internet connection.

Yes, the computer still requires a mouse and keyboard, but those are wireless and detached. So this “desktop” computer can be carried and used just like a laptop, except it has no operating battery…yet.

Think about it: As desktop computers use flat-screen monitors and the real estate required for everything else shrinks, the lines have been blurring. The iMac G5 almost erases the line.

In the future, Apple could add “tablet” technology like some Windows machines now offer, and they can dispense with the keyboard and mouse. And then what!?

I’ve predicted for some time that computers will move ever forward into becoming tiny personal assistants. With excellent speech recognition and synthesis at hand, “smart phones” (such as palmOne’s Treo 650) are now serving as PDAs, voice recorders, watches, cameras, MP3 music players, audio book players, GPS guidance for driving, and streaming Internet-based worldwide radio. Soon, they’ll be offering TV and picture phones. There’s not much more to ask of these versatile little appliances. Or is there?

Within 10 years, I predict the arrival of what I call the Personal Assistant (PA). You’ll probably wear this like a necklace. It will communicate with you via spoken conversation and — for fast data transfer — display of printed material and images on a special eyepiece that resembles a sunglass lens. (It will monitor your body language to determine your comprehension and adjust speed of display in real time.)

By the way, the display technology is already entering the market. Transformational Technologies Portfolio holding Microvision (MVIS: NASDAQ) has a “heads up” eyewear display that rivals HDTV.

People will probably receive PAs at an early age, and your PA will grow with you. It will remember everything important that ever happens to you, all holidays, friends’ and relatives’ birthdays and other special events. It will continually monitor websites for new books, videos, music and other items of interest to you.

How will it know? It will be intelligent…it will start out knowing basic things about people in general and then, over time, tailor its actions to you personally. It will know your personality, quirks, habits, needs and wants. Your PA can let you know — at predetermined times or upon request — which books have just come out that you’ve flagged for attention, or even that should be of interest to you based on your past reading preferences.

PAs will start working as stupid secretaries, evolve into smarter secretaries and eventually will become indistinguishable from the highly skilled full-time personal assistants whom celebrities pay $60,000 and up. As they prove their reliability, they’ll eventually gain the right to initiate phone calls and make appointments on behalf of their owners.

Since your PA will have no desires or problems of its own and will interact with you in a very “human” way, I expect that many people will come to rely upon it if it were a dedicated friend.

Working with others’ PAs, your PA could even play matchmaker. For example, I can envision walking through a supermarket and my PA whispers, “There’s a single woman in the produce section who meets your criteria in a companion 87%. I’ve taken the liberty of discreetly polling her PA, and it says you meet her criteria 74%. Here’s a photo. We’re waiting on you two to tell us if you’d like to meet.” (Of course, my girlfriend might have a thing or two to say about this…)

If this seems absurd to you, you haven’t been closely following recent developments in heuristics, artificial intelligence and speech recognition. For instance, right now I use a speech recognition program that renders my speech into written text with better than 95% accuracy. You can buy it for less than $200, and if you write a lot, I recommend you consider it. It’s called Dragon Naturally Speaking 9.0 and is far better than any other speech recognition programs currently available.

The maker of Dragon, Nuance (NUAN: NASDAQ) is, of course, another Transformational Technologies Portfolio holding. And I have recently made a recommendation about this stock.

Right now, computers can diagnose medical conditions better than 90% of medical doctors. They’ve invented things that have won patent protection. A computer is Garry Kasparov’s greatest chess opponent. And of course, they manage billions of dollars of investment capital in all but name…

I suggest you take a little time to consider how computers may affect your life as they grow ever more versatile, intelligent and compact. If you want some help, read Ray Kurzweil’s book The Age of Spiritual Machines. It reads like science fiction but it’s not. It’s grounded in the best scientific and engineering thinking of our time.

Meanwhile, this ongoing juggernaut remains a pillar of what I call, “the technological tidal wave,” and I’ll remain vigilant for profitable opportunities to invest in tomorrow’s leading computer companies today.

To your profitable future,

Jonathan Kolber
July 26, 2006

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