NEW YORK (AP) : To understand why predictions of a paperless society have not come true, just take a look at the fax.

Despite new technologies that make it easier to send information electronically, sales of fax machines continue to soar. But analysts warn that the popularity of fax machines could wane in the years ahead, thanks to a nascent technology that enables computer files to be transmitted over the Internet directly to a printer. For now, "a lot of people still like seeing the paper go through the (fax machine) to know that their document went across," said David Haueter, a senior analyst at market research firm Dataquest.

In 1999, more than 6.6 million fax machines were sold, an increase of 16.5 percent from the year before, according to San Jose, Calif.-based Dataquest. By 2004, the number of sheet-fed fax machines sold is anticipated to rise to more than 8.4 million, during which time the average cost of a fax machine is expected to fall by more than a third, from $240 from $364. Home offices and small businesses, attracted by lower costs and faster print speeds, accounted for more than half of all units sold in 1999, said Haueter. "A lot of people go into a store to buy a cordless phone and for a few bucks more they can get a fax machine and use it as a phone too," he said. Aside from sheet-fed fax machines, the frenzy is also being fueled by fax software for personal computers and heavy-duty machinery found in offices that bundle printing, faxing and copying functions into one big beige box.

There are drawbacks to faxing, most notably the costs incurred from long-distance telephone charges and the loss of digital quality when documents are sent across traditional phone lines. But not every business owner in this brave new world feels it is necessary to be on the cutting-edge of technology in order to be successful. "I like to have the paper copy, personally," says Herbert H. Rozoff, president of the Chicago-based Herbert H. Rozoff Public Relations. "I'll make notations on it and route it to somebody else in the firm... or make six copies and send it out rather than e-mail." When given the option of fax or e-mail, the overwhelming majority of Rozoff's clients choose fax, he said. To handle such demand, Rozoff had to hire an outside firm to send thousands of pages of pressreleases to his clients every month.

But analysts say fax machines could fall out of favor as a new technology being developed makes it possible to send high-quality printouts electronically as fast and as easy as it is to send e-mail. A consortium of printer manufacturers is developing a standard, known as the Internet Printing Protocol, that will allow businesses like Rozoff's to send high-quality documents over the Internet to a specific printer with its own Internet address. "The attempt of IPP is do high-quality printing from my desktop to your printer with exactly the same quality as my printer," said Don Wright, director of strategic and technical alliances at Lexmark International Group Inc. and chair of the Printer Working Group, which oversees the development of IPP.

Tim Bajarin, president of the Campbell, Calif.-base technology consulting firm Creative Strategies Inc. said the printing protocol holds promise. "Ten to 15 years from now there's no question that fax machines could go by the wayside." Those familiar with the protocol say its completion is at least seven years away. Once the protocol is available, the days of formatting documents sent as e-mail attachments and then printing them out will be over. More importantly, Bajarin said, computer users who lack an arsenal of word processing and graphics software and cannot format certain documents for printing will be able to avoid such hassles in the first place.

Microsoft's Windows 2000 operating system will support IPP services, and other companies, such as Novell Inc., Sun Microsystems Inc. and International Business Machines Corp. are creating software to handle it in the future. Lexmark, Hewlett-Packard Co. and Xerox Corp. are currently developing printers that can run experimental versions of IPP. Some companies are testing the technology internally, but analysts say widespread printing over the Internet will only gain popularity when senders can be assured that documents delivered across networks will be secure and receivers have ways to restrict printer access to people with passwords.

Pending federal legislation that would set national standards for electronic signatures and records and give them the same legal validity as written contracts and documents may also help. Bajarin said Internet-ready printers will be a major advance for businesses and consumers when it comes to sending digital quality documents easily and inexpensively. There is only one real downside, he said: "We're just not getting away any time soon from that piece of paper that we can crinkle in our hands."