SAN JOSE, Calif. -- Talk about expanding your horizons.
These days, when executives at Microsoft Corp. are looking to make a deal, they're as likely to call on cable TV suppliers as on other software firms.
At Apple Computer Inc., the hottest new prototypes don't resemble computers at all, but rather Nintendo sets and TV consoles. And in the R&D lab at Sun Microsystems Inc., researchers ponder bringing their technology to an utterly strange locale: the living room.
In a profound shift that offers both opportunities and dangers for American high technology, the world of computers and the world of consumer electronics are coming together.
Over the next five or so years, new kinds of products will enter the market, offering dizzying combinations of television, telephones, computers, music and games in devices that will blur the customary distinction between "information" and "entertainment."
Also, existing computer products will be heavily influenced by the technology and business approaches of consumer electronics, taking their inspiration from the Walkman and becoming cheap, small and ubiquitous.
"Sometime around the mid-1990s, the processor that drives digital TV sets will be the same one in low-priced computers -- maybe even in all computers," said Jim Clark, president of Silicon Graphics Inc. "The computer industry will be in partnership with consumer electronics."
This "consumerization" of computers is occurring because the advanced entertainment devices that have shrine status in America's Sony-ized homes are rapidly going digital.
Just like computers, machines such as CD players and laser discs store information in the language of ones and zeros.
As they become more like computers, these products will feature ever-bigger servings of sophisticated electronics.
In fact, the coming digital televisions are expected to have the processing power and memory of today's most powerful desktop workstations.
But because the customer base in the consumer electronics world is so staggeringly large, it is expected to exert a powerful "pull," drawing traditional computing into its orbit and reshaping it in its own image -- much as personal computers reshaped data processing during the 1980s.
Wayne Rosing, Sun Microsystems' vice president of research and head of its newly formed lab, said, "A fusion is coming, and if you don't deal with it, you'll end up a buggy whip manufacturer."
While the fusion will mean new opportunities for U.S. companies, it will also force them to compete in a technology sector that America abandoned in the 1970s, with key skills, such as miniaturization and high-volume manufacturing, almost exclusively in the hands of Japanese companies.
Some people worry that it could leave Silicon Valley in a distinctly supporting role, like the one Los Angeles plays as the U.S. design center for the Japanese auto industry.
While they may simply be interested in a partnership with a Japanese giant like Sony or Matsushita, a number of U.S. computer companies are looking to continue growing by expanding into these new consumer markets -- especially as they watch their traditional business customers approach the saturation point with computers.
"For years, when I talked to computer companies about the importance of consumer markets, people always shrugged and said, 'We only sell to business,' " said Tom Mandel, a futurist at SRI International in Menlo Park, Calif. "But in the last year, people have changed their tune. Now, they perk right up."
It's not just the big companies that are hot on the trail.
"We're actively looking at this market for investments," said Kevin Compton, associate partner with the Palo Alto, Calif., venture capital firm Kleiner Perkins Caufield & Byers. "Some big players will develop out of start-up companies, especially people supplying content to the digital home."
Existing companies are dealing with the change in a number of ways, though they have advanced R&D labs in common, something Microsoft, Apple and Sun all started this year.
A few firms, like Apple, are already planning specific products. But more often, companies are still thinking of general ways to influence technology development.
At Microsoft, for example, Chairman Bill Gates says the next generation of computer-like home devices will need software -- and wants to make sure his company is its leading supplier.
Nathan Myhrvold, Microsoft vice president of advanced technology, said the company hopes these new machines -- from wallet-sized computers to wall-sized TV sets -- will all be able to run the same programs and swap files.
To help make that happen, Mr. Myhrvold said Microsoft officials regularly fly to Japan.
They are also embarking on a major push with cable television firms, whose fiber-optic cables are expected to accelerate the digitalization of the home.