Indianapolis (IN) – “What am I?” asked the little translucent caption, as it floated innocently above the landscape, the mountainside, the beach, and the park, merrily rejoicing in its possibility-filled anonymity. Play a game with me, fill in the blanks, conjure me into what you want me to be. Okay, we reasoned with ourselves, we know it’s really going to be Windows – it is, after all, Microsoft asking the question – but what is this thing, really, we asked? Could this be the framework for a fun and useful device that will tell us where we are, keep in touch with the office and our family, gather the news from all over the world, and play the music we want wherever we happen to be? This could be something.
This “something,” as various somethings from Microsoft turn out to be, is another way to cut, slice, and dice Windows into a smaller form factor. Okay, we thought, so this could be a nice platform for running Office applications while you’re on the go. Well, no, not really – you could run Office on this little device, but without a keyboard and with an interlaced screen, that’s going to be a challenge. Okay, then, so it’s a portable media device, that enables users to play all kinds of content from local storage and the Internet. So there has to be connectivity. A-a-ah, not exactly. There could be connectivity, in a sense, provided someone else with the infrastructure to do it wanted to step up to the plate and provide it. Now, if you have a cell phone with Bluetooth, you could conceivably wangle something on your own.
Hmm…So not exactly what we expected. But it’s a touch-sensitive screen (albeit not pressure-sensitive), so there’s bound to be the same types of portability software that Microsoft makes available for touch-sensitive connectivity devices like the Palm Treo. Nope, no dice. There is a nifty little program launcher, with little glass buttons that apparently go “ding” when you touch them. Oh, but that’s a feature of Vista, which is coming down the road in October or so, right about the time you have to upgrade.
While we’re waiting for that, can we at least play a game or something on this thing? Maybe, if you’d like to download the SDK, and a free copy of Visual Basic Express, and come up with one.
Six days after the official announcement of the Ultra-Mobile PC (UMPC) from Intel, and five days after its subsequent re-announcement from Microsoft, we’re still left asking the same question, “What the blazes are you?” While Intel and Microsoft should be given credit for tackling the very serious issue of how to make everyday PC functionality more portable and more usable, you would think that the first iteration of what had been code-named “Origami” would have focused on form and function…or at least one of those. Pick either one. But what we have instead is something that’s larger than the average pocket, that can’t dial out, that doesn’t have a discrete way to connect to the outside world, is somewhat expensive, and perhaps most unanticipated of all, is power-hungry. While demonstrations of UMPC devices at CeBIT in Hannover all weekend have featured the device playing movies, some observers have noted their batteries will be completely drained before the movie has finished.
Some of us liked the UMPC better when it was a merrily bouncing pixilated mass of nothingness skipping over an endless array of Corbis stock footage. In search of some sensibility, we waited until the dust (or lack thereof) settled a bit, and then sought out the advice of respected analysts known for their fairness and attention to detail. We asked them the question that remained on our minds: What were they thinking?
“Apparently they’re thinking that the price and power efficiency and design possibilities around PCs have come to a point where they can reasonably create a second or third device for consumers, based on that architecture,” answered Ross Rubin, director of industry analysis for NPD Techworld. Such an architecture, he proposed, could “enable a wide range of relatively portable applications, including movie viewing, GPS navigation, digital camera photo storage, and perhaps with the appropriate wireless connections, things like mobile Web browsing or video conferencing, or e-mail.”
With the appropriate wireless connections. It would appear that this is a problem, for now. In fairness, Rubin argued, that’s not Microsoft’s or Intel’s problem right now – it’s the wireless carriers’. “The challenge, particularly in the US,” he said, “is that high-speed wireless data is still being rolled out by some carriers, and the components to create those connections are still relatively expensive. Certainly the service fees for those components are pretty expensive, and to integrate a radio would only enable manufacturers to appeal to customers who had a specific carrier.” In other words, if the UMPC design team were to make a decision about wireless now, that decision would automatically exclude the design from being picked up by at least two-thirds of the available wireless carriers in North America.
“Anyone would argue, I think, that [the UMPC] concept is a great one,” stated Bob O’Donnell, program vice president for clients and displays at IDC, in response to our burning question. “I think the hype that’s driven this thing forward has been because that is an appealing concept to a lot of people. The issue is, first implementations are leaving a bit to be desired, particularly on the price side.”
At a low price point, O’Donnell reasoned, UMPC becomes very appealing regardless of what it is, exactly. An ultimately portable device with even the promise of connectivity, at the price of an iPod, could be a sure sale. And at last, some of the infrastructure is finally in place to make such a concept feasible. “I think that concept is good, and at the right price point, it would be fine,” he continued. “The problem is, when you’re talking $800, $1000, now you’re competing with a full-blown notebook, and that’s not really what you want to do. That’s the problem, but that was not the intention.”
What Intel and Microsoft originally wanted to do, O’Donnell explained, was to create a new category of PC that could spark its own market segment, in-between a handheld and a notebook, using relatively inexpensive, easily mass-produced components. In the intervening period while UMPC was being developed, however, the market concept of a “notebook PC” broadened, argued NPD’s Rubin. Whereas on one extreme you have larger notebooks becoming popular because of their widescreen displays and multimedia capabilities, on the other extreme, there are PCs from radical designers like OQOo, featuring clamshell keyboards and swivel screens, and also the Fujitsu LifeBook with similar features and a stunning design.
Currently, the LifeBook sells for prices starting at least $1400 and the Oqo Model 01+ from about $1500, which is well above the price point UMPC is staring at for now. “But there’s a lot of versatility in that [notebook] market,” argues Rubin, “and there’s not a very thick line separating Origami devices from something like a Fujitsu LifeBook, which has a 9″ screen and has Tablet PC functionality, where the screen can twist around [over] the keyboard. The LifeBook is a more expensive device, it’s a thicker and larger device, but a lot of the usage scenarios today could be the same.”
Whereas OQO and Fujitsu have optimized for size and user appeal, Rubin explained, Intel and Microsoft have optimized UMPC for volume. “So maybe the components are not quite as cutting-edge as what’s being used in the OQO,” he said, “but you can build a device for quite a bit less, even if it’s not quite as portable.” Once the price starts working its way down to that $500 “sweet spot,” then with a few new applications having (hopefully) been introduced by that time, the burden of coming up with a single compelling reason for anyone to own this thing, becomes less and less of an issue, Rubin reasoned.
“To me, one of the most important things about this, is price,” stated IDC’s O’Donnell. “If it’s under $500, it’s a fancy gadget. People spend that much on iPods. So there’s this sense that, at a low price point, it could be very interesting and very appealing. Think about all the free WiFi networks that are out there now that you could use this thing with, and it gives you a full browsing experience as opposed to trying to browse on a two-inch cell phone, which is a horrendously useless experience. And yet people are getting more and more used to having information access almost anywhere they are, at almost any time.”
Yeah, how about that ubiquitousness of information access! Oh, that’s right, that part’s not ready yet. “If [UMPC] had wide-area connectivity,” stated Rubin, “that would have more interest to me, because then it would be easy for me to connect to my office, check RSS feeds, or send digital photos to folks from the field…that’s a fairly unique application that I really don’t see being met in the marketplace right now.”
A ubiquitously connective device (connectivity not included)
So what about that wide-area connectivity thing, Bob O’Donnell? “The problem there is, of course, we’re not quite there yet. There’s no reason why you couldn’t put 3G wireless in this – those chipsets are available, and they’re putting them in notebooks. Supposedly, second generation [UMPC] will have that. But the bigger problem is the service provider issue, which is, ‘Great, I have the hardware, but you know what? Verizon’s going to charge me 60 bucks a month.'”
“Here’s the challenge,” offered Ross Rubin, “and here’s why saying the device has potential is not apologizing for it: Let’s think about the future of wireless connectivity and the speeds that will be available a year or two from now, and these broadband speeds that we’re going to have access to – 2 Mbps, maybe more when you think about WiMax or 4G. What kinds of applications are you going to roll out on a 2 1/2″ screen for a smart phone that can take advantage of that kind of thing?” In other words, maybe the next-generation handsets and connectivity devices may be the first to roll out WiMAX or other standards, but they’ll also be the ones stuck with the miniature screen.
So what services would consumers need wide-area broadband access to all the time? Rubin posed this question at a WiMax conference in 2005, and the answers he got all had to do with “on-demand” functionality – audio and video conferencing, and location-based services. It’s at this point where the WiMAX attendees realized, said Rubin, that a smart phone has a little portability problem, where the two-inch UI no longer seems an asset. “UMPC is a compromise between this smart phone platform and the notebook platform,” he continued, “with its family heritage being a lot closer to the notebook platform. But the intention is to get it down to a price where it is perhaps competitive with some of these higher-end smart phones, or that it could realistically be subsidized down the road by a carrier. That’s why I think, of all the things that this product needs, probably the most important missing link right now is this high-speed wireless.”
“That would be great,” agreed IDC’s Bob O’Donnell, “but getting [carriers] to do that is going to be a challenge. My sense is, the service providers have different business models, and different ways of making this happen. Those guys have to wake up and [think of this as a] basic guns-and-butter economy [issue]. ‘If I lower the price, I can get a lot more people, that makes up for the fact that I have to lower the price.’ But that’s not the UMPC guys’ problem; that’s the 3G network guys, and they have their own sets of issues.”
In other words, UMPC is going to have to appeal, somehow, to the carriers as a possible solution to a serious problem. But for them to realize this, it will be they – Verizon, Cingular, T-Mobile, and the others – to fall in love with this device. And as we’ve already figured out, falling in love with the UMPC is a lot more difficult today than many thought it would be last week.
“The problem is, unfortunately, classic Microsoft,” said O’Donnell. “They’ve got a good concept, but the first couple of iterations are not cuttin’ it…Bottom line, it’s a mixed bag. I don’t think it’s totally out to lunch. I think they’re going to have a hard time with the first iterations at the price points they’re talking about. Then the question becomes, by not having a great product out of the gate, did they blow their opportunity?”
One could very easily answer, “Yes,” explained O’Donnell, and make a case in the affirmative that would be very difficult to refute. “The reality is, no one is banging down the door saying, ‘I need this product today.’ To which I then [would have asked], ‘Then why not have waited until you had it totally nailed at the price points you needed to hit, and then introduce it?'”
“There’s certainly a lot that needs to happen before Origami reaches its full potential, whatever that may be,” added Ross Rubin. Even at the low end of the current UMPC price scale – $800 – a purchase will seem out of reach for many consumers, he argued. “Once we get down to $500, once the battery life gets a little better, once we see a few applications that really enable this platform to shine, instead of just repurposing today’s notebook applications and, indeed, applications that are non-optimized for a device that lacks a keyboard, then maybe more of the device’s potential will be realized.”
Maybe then, a year or so later down the road at least, we’ll be able to answer the less-and-less-burning question, “What am I?” And the answer to that question may be more appealing than just, “I am a product category.” “If you’re going to launch a category, you need a hit product,” stated Bob O’Donnell. “You can’t just say, ‘Here’s a cool category…[now go] find the hit product.'”
There are some who would argue that we should give this new product a fair chance in the market. The problem with that argument is, just how much of a product is this UMPC? How well thought-out is it, even as just a framework for a category for a platform for a market segment? Think about this simple question: Today’s first-edition UMPCs, including the Samsung Q1, will run Windows XP Tablet Edition 2005; the full-blown Windows Vista that the UMPC framework promises will, of course, only be available this fall at the earliest. How will a customer upgrade? Vista will be supplied on CDs; where will they go? Does a consumer literally have to purchase one of the business premium editions, in order to create an administrator/client relationship and a remote PC uplink between her big PC and her little PC, just to be able to use the CD-ROM drive on the big PC? Will the connection be over a USB cable? How will that be secured? And will the customer need two Vista licenses; one for the big PC, the other for the UMPC? Or does he get any credit for having had to purchase Windows XP first?
The fact that nobody with whom we’ve spoken – not our analysts, not our experts, not the people on the scene – have been able to glean the answer to these questions, is an indicator of a deeper dilemma: The UMPC is not a complete system – in many respects, not a “real PC.” And so, a few weeks after that tantalizing question, “What am I?” was first asked, the only answers we can truly give at this point have to do with what the UMPC is not.