The Info Pad Creeps Closer

It's hard to believe that it's been four years since I first wrote about the idea of an info pad.  I thought for sure we'd have one by now, but to my immense frustration it's still not here.  We're gradually getting closer, though, so I think this would be a good time to revisit the idea.

As I explained in my original post on the subject (link), the info pad is a small tablet computer designed not for consuming content but for managing the information needs of a knowledge worker.  It's a business tool, not an entertainment device.  It has a stylus, so you can take notes and sketch on it, but it also acts as an extended memory, letting you access your old files, messages, contacts, and other important documents.

Mike Rohde drew a picture that captured the idea well (link):



For people who work with huge amounts of information, the info pad is a Holy Grail device.  It's the extended memory that captures what you're doing during the day, and lets you easily recall anything you need to know, whenever you need it. 

We studied the info pad idea when I worked at Palm.  There was a big audience for it, very distinct from the people who buy mobile devices for entertainment or communication.   Unfortunately, Palm got into financial trouble before we could do anything about it.  Since then I've tried twice to pull together a startup to build one.  The result was always the same: many people loved the idea (I can't tell you how many venture capitalists wanted to be beta testers).  But no one wanted to fund it, because hardware startups are viewed as incredibly high risk in Silicon Valley.  I was told to go to the big hardware companies and convince them to build it, but when I tried they were all focused on copying each other rather than creating anything new.

So I settled back and waited, figuring someone would eventually build it.  And I waited.  And waited. 

I'm still waiting today.


Signs of hope

Lately we've started to see some devices that raise my hopes.  The info pad isn't here yet, but I wonder if we're starting to see the first hints of it on the horizon.

The first is the Boogie Board, a tablet device that's literally a replacement for a dry-erase board.  It has a touch-sensitive monochrome screen, so you can write on it with a stylus, finger, or any other object.  Like a dry-erase board, you can't save pages or do much of anything else with them.  So it's not even close to an info pad.  But it currently sells for just $40 on Amazon, showing that basic tablet technologies can get to extremely low prices (link). 




A step up from Boogie Board is NoteSlate (link).  It's a tablet note-taker that works a lot like a piece of paper.  Like Boogie Board, it has a monochrome screen (no grays) and you write on it with a stylus.  Unlike Boogie Board, you'll supposedly be able to save pages, and share them with others via wifi.  The online illustrations of the NoteSlate prototype look nice, although text on its monochrome screen looks a bit blocky (I'd be a lot happier with smaller pixels and grayscale, so you could do some subtle anti-aliasing of lines).



This closeup shows the graininess of the writing in the mockup device.  The right software, and a better screen, can fix those jaggies.

The price will supposedly be $99, although that model may not include wifi.  It's hard to tell exactly what NoteSlate will do because it's not shipping yet, the developer is located in the Czech Republic, and the company's website is written in broken English.  Here's a sample:

Sorry if we were not able to response sooner all the great emails. When we have been preparing year ago all this, about bit weird NoteSlate device, we hoped this kind of exciting story becomes real, real product. We are going to make this thing real, also thanks to you, to produce open-source NoteSlate device and create unique NotesLate handwritten network. For 99$.

You don't have to speak good English to create a great product.  But the fact that the company can't afford to get an English native speaker to edit its website implies that it has very few resources.  That will make it hard to finish the product, let alone get it into retail distribution.  I'm amazed that such a small, early-stage company has managed to get so much press coverage.  Some websites even speculate that the product may be a hoax (link).  I was able to find an interview in Czech with the product's designer, Martin Hasek, and he gives some more details on the plans.  You can read Google's translation here.

NoteSlate has been nominated for an Index award, a design competition based in Denmark.  The online nomination gives more details on the product (link).  Reading between the lines, it looks like Martin is a designer who cooked up the NoteSlate idea.  He's apparently working with Albumteam, a Czech company that sells an electronic photo viewing tablet (link).  And there was a hint that the manufacturing might be done by another Czech company, Jablotron (link).  At this point I'm struggling to interpret auto-translated Czech blog posts, which is not a great way to get information, but that tells you how difficult it is to find hard details on NoteSlate.  (If anyone reads Czech and can give a better translation, please post a comment.)

The bottom line, I think, is that NoteSlate may be real, or may be caught in limbo.  When I was trying to get the info pad idea funded, I toyed with the idea of announcing it, getting people excited, and then using the excitement to get someone to fund it.  That felt too much like a pyramid scheme to me, but it's a possible approach.


High hopes for the Flyer.  There are several other upcoming tablet devices that bear watching, including the mySpark education tablet (link), and the Kno dual-screen device (link).  It's very hard to tell if any of these will actually ship.  But the device that has me the most excited is one that I know exists: the HTC Flyer, a new Android-based tablet computer previewed earlier this month.  The Flyer is a seven-inch Android tablet, very similar in looks to the tablets coming from Samsung and Motorola.  But there's one crucial difference: the Flyer comes with a stylus.

That sounds like a simple change, but actually it's a profound difference.  The iPad and most Android tablets can't tell the difference between a stylus and a finger.  If you try to write on them with a stylus, the screen will also sense the places where your hand touches the screen, and you'll end up with multitouch confusion.  HTC has paid extra for a touch sensor that can distinguish between the stylus and your hand.  Touch it with the stylus and you'll get ink on screen; touch it with your fingers and you can swipe, pinch, or do anything else you'd expect from a touch tablet.

HTC has also added a note-taking application to the tablet, so you can write on the screen during a meeting and save your notes to Evernote.  You can also record sound during a meeting, in a process that reminds me of the LiveScribe pen.

None of this is completely new -- Microsoft has been pushing Tablet PC systems for note-taking for the better part of a decade.  But they were extremely expensive, complex, heavy, and had very short battery life.  If you want an example, check out Asus' new $999 tablet PC, the EP121 (link).  In contrast, the Flyer looks to be the first product that marries the good ergonomics and usability of an Android tablet with reasonable note-taking.

What's missing.  Unfortunately, the Flyer has several very significant drawbacks.  The first and most significant is its price.  There have been several reports that the Flyer will see for about 700 euros in Europe, which is about $950 in the US (link).  That's an outrageous price.  When we studied the info pad idea in the US and Europe, the top price most people were willing to pay was about $499, and the demand sweet spot was $299.  At $950, the Flyer is going to be compared to full-function notebook computers, and it won't come off well in those comparisons.  Next to a notebook, it has very little memory, no keyboard, and few apps.  The price makes it an interesting curiosity for technophiles, not a mainstream product.

Maybe HTC is hoping for a big mobile operator subsidy that will make the Flyer more affordable.  Or maybe it's planning to strip out some features.  The announced version of the Flyer has a 3G cellular radio built into it, which increases its cost.  HTC says a WiFi version will come out later.  That might cut as much as $100 from the parts cost, which could translate to a couple of hundred dollars retail.  But still that would leave the device at $750, which is vastly too expensive.

I am also worried about the marketing of the Flyer.  HTC is positioning it as an ideal device for gaming, browsing, productivity, communication, and just about anything else except making espresso (link).  The message reminds me a lot of the old Palm LifeDrive (link), and we know how that worked out (link).

It's very easy for tech companies to fall into this sort of kitchen sink marketing, because they don't want to give up any possible customers.  But the messages tend to cancel each other out -- if the device is great for gaming and music, it sounds inappropriate for business productivity, and vice versa.  This also leads to bad design decisions.  If you build in graphics acceleration, 3D, HDMI video, dual cameras, and a stylus, the device gets too expensive for any single use.


Would your boss reimburse you for buying this?

It doesn't help that HTC has a clear case of iPad envy.  Their website even echoes some of Apple's iPad language:

Apple:  "A magical and revolutionary product."
HTC:  "HTC Flyer's magic pen transforms anything...Work or play, it's magic for the whole family."

The trouble is that Apple's already cornered the market on people who want a magical tablet experience.  HTC needs to play counterpoint to that, not imitate it.


Where the heck is Baby Bear when we need him?

I feel like Goldilocks.  Papa Bear (Tablet PC and Flyer) is too expensive and too loaded with features.  Mama Bear (Boogie Board and NoteSlate) is too limited.  What I want -- what's required to kick off the info pad revolution -- is a product in the middle on both price and features, optimized just for managing information.  At its current price, the Flyer is destined to sell very poorly.  When that happens, I hope HTC won't cancel the product.  Instead, it should strip out the 3G and the entertainment features, focusing it into a business tool that could sell for less than the magic $499 price point.  If Flyer doesn't survive, maybe NoteSlate or one of the other note-taking tablets will make it to market. I can always hope.

Once we get the right hardware, all we'd need would be the right software to make the info pad a reality.

We don't have the info pad yet, but we're getting closer. I am cautiously hopeful that I won't have to write this post again in another four years.

Reckless speculation about the Apple tablet

One of the easiest ways to embarrass yourself online is by making predictions for the record about an unannounced product. You're layering risk on top of risk -- not only might your predictions be wrong, but the information you're basing them on might be wrong as well.

But it's fun so I'm going to do it anyway.

Assuming that Apple actually announces a tablet product on Wednesday, here are four things to watch for...


What does it do, and who is it for? Aside from being cool, the tablet will need to solve some real-world problems for normal people if it's going to be accepted. In my opinion, there are two potential markets for a tablet, based on market research I've done in the past. One market is as an entertainment/browsing/content device, and one is as a business information-management tool (an info pad, a subject I wrote about here).

The worst thing Apple could do is try to target both markets with one device, in my opinion. The customers are not compatible, and they need a different mix of features. You could end up with a tweener that doesn't really delight any one group (can you say Palm Pre?)

Based on press reports, and friends who have links to Apple, it looks like they're going for the entertainment market. I think that's wise -- it's a natural fit with Apple's relatively young, creative image. It also leverages the infrastructure Apple has already created for the iPod.


Watch the infrastructure. Another problem Apple could solve is a major malfunction in the market for content products (magazines, books, short stories, video, etc). Content creators today have a couple of choices -- give their stuff away online, or pump their materials through a traditional distribution system that absorbs 85% or more of the revenue on overhead, distribution, printing costs, mailing, etc. Either way, creators often get shockingly little reward for their hard work.

What creators need is a system that will let them bypass the current distribution system entirely, selling directly to consumers and pocketing most of the revenue themselves. They could actually charge less money per copy, sell in smaller quantities, and still make more profit.

Apple could create that billing and distribution system. Or it could create a system that attempts to reinforce the power of today's content middlemen. The key question will be how easy it is for a content creator to sell something through Apple directly, and how big their revenue cut is. If Apple shares 70% or more of revenue, and lets anyone create their own content, the floodgates will begin to open.

This could have an enormous impact on the content industries. Ultimately it would give much more power to content creators, at the expense of publishers and other middlemen. And it would enable consumers to get a wider variety of entertainment and information than they can today. (I wrote about some of the possibilities here. That article is old now, but the situation has barely changed in the meantime.)

So, even though I am intensely interested in the Apple tablet's technology, I am even more interested in the business model around it. That's where the real revolution could happen, in my opinion.


Ignore the first 100 days' sales. A company of Apple's stature is almost always able to drive significant sales in the first three months of availability, especially when creating a new category product. There are enough fans and early adopters to virtually guarantee a sales spike early on. The big question is what happens after the enthusiasts have bought.

Remember, the original Macintosh 128 was quickly snapped up by about 70,000 drooling enthusiasts (including me!). We bought even though the computer had ridiculously little memory and almost no software. Picture a word processor that can't create a document longer than 10 pages. I paid $2,500 for that! After the first three months, Mac sales flattened, and didn't recover until Apple fixed the shortcomings of the product.

So I expect a sales explosion in the first three months. In fact, if there isn't one, the product is in deep trouble (see Apple TV). But even if it sells out at first, that doesn't mean much until we see at least six months of sales data. Preferably nine.


Price is a huge unknown. Here's the story I heard from my Apple alumni friends: There is a gap in Apple's product line. Apple has the iPhone and iPod Touch at around $300, and it has the iMac and MacBook at about $1,000. It needs something in the middle, and the tablet is expected to fill that gap.

The price point I heard from my friends was about $600. Lately the price rumors have gone higher, and I don't know what to think about that. Could be true, could be wrong, could be Apple leaking a fake price so they could "surprise" people with something lower. All I know is that at $1,000 they are in conflict with the low-end Macs, and at $300 they are in conflict with the iPhone, and my friends are adamant that they won't do either.

But even if the price is around $600, I think there is a problem: In all the market research I've done on mobile devices, the latent demand for a tablet device is centered at prices of $199-$399. You can skim a very small percent of the users at $499, but even that is a stretch. A price of $600 or higher is way beyond the comfort zone of most potential customers for a tablet, no matter how great the device is.

It scares me on Apple's behalf. You can get into deep trouble when you design a product around your business needs rather than the customer's feature needs. You start rationalizing things: "We know we ought to sell it for $300, but that doesn't work for us, so we add a bunch of extra features that ought to be worth $300 more, and we plan a big marketing campaign, and we convince ourselves that the product is so special that people will feel compelled to open up their wallets. It's just a couple hundred dollars more, after all..."

Nonsense. Some products have natural price points, and it's very hard to change them. Great marketing and great features get you a 10-20% premium, not 100%.

So watch the price on Wednesday. If it's in the $300-400 range, I am very comfortable with Apple's chances. If it's over $600, I will be very interested to see what special magic Apple has put into the product. I think they'd need features on the order of burning bushes and loaves-and-fishes in order to sustain a price of $600 or more in the long run.

But for the record, I'd be delighted to have Apple prove me wrong.

Amazon Kindle: Not a home run, but an interesting start

By now I assume you've read about Amazon's Kindle e-book device. I think it's interesting and important, but more for its business infrastructure than for the device itself. And I'm not at all sure that it'll be a commercial success, unless it gets a lot more content quickly.


What they announced

Kindle's hardware is a lot like that of the Sony and Iliad e-book readers. I won't bother repeating all of the specs; you can find a good summary on Engadget here and here and in a lengthy Newsweek essay here.

The industrial design of the device looks uninspiring to me. It's made of white plastic, a color scheme that most people associate with ease of use, low price, and limited features. Considering Amazon's strong emphasis on ease of use in its announcement today, I guess the color makes sense, but it's at odds with the $399 price.

I haven't touched a Kindle yet, so maybe it looks nicer in person. But in the photographs its sloping edges and slant-key keyboard do nothing for me. It looks a bit like a badly-carved wedge of Parmesan cheese. There are a total of 54 buttons, controls, and keys on the face of the device, so naturally it looks cluttered. There's virtually none of the lust-inducing elegance of the iPhone; the design screams "utilitarian."

"Is it just me or is that thing one hell of an ugly thing to walk around with?" --Comment posted to Newsweek's article on the Kindle

The design is not necessarily a bad thing; the device is going to live or die based on its usefulness, not its looks. But the lack of a lust factor makes people much more willing to nit-pick its features and price. So far Kindle is rated 2.5 out of 5 stars on Amazon's own website, with most of the negative ratings coming from people who have never even touched the device.


Clever wireless, vulnerable business model

Interesting use of the network. Things get a lot more elegant when you look at the services attached to Kindle. Amazon has built in a radio that talks to Sprint's EVDO data network. Wireless is used to deliver almost all content to the device (except for MP3 files, which sync via a USB cable). This is both attractive and disturbing.

The attractive part is that Amazon can pre-test each Kindle device to make sure they connect to the Sprint network before they get shipped to the customer. This is a huge advantage over WiFi. One of the dirty little secrets of WiFi is that non-PCs often have a lot of trouble connecting to WiFi routers in homes and offices. I don't know why this happens, but I suspect it's because the router vendors test their hardware mostly against PCs, and never find the bugs in connecting to other devices. Trouble-shooting a Kindle that couldn't find the network would be a nightmare, and Amazon has bypassed the whole issue by leaving WiFi out of the device.

I also like Amazon's decision not to hit its users with a monthly fee to access the network. Instead, the charges are embedded in the cost of downloaded content. This means that users who buy a lot of content will be subsidizing the ones who read only a little, but Amazon has hidden the charges so well that I don't think anyone will notice. Kindle makes the wireless network do what it should do: Disappear.

I have two worries about the use of EVDO. The first is that if someone lives outside of network coverage (like at my house) their Kindle won't work properly. I would have preferred to see WiFi included as a backup. The second problem is that because Amazon has to pay for that wireless connection, it has to tax virtually any information transmitted to the device. You can load documents onto the device by sending it an e-mail, but you'll pay 10 cents for every message. That doesn't sound like much, but it's annoying to have to pay anything at all for something that's normally free.

Likewise weblogs: You have to pay $1-2 per month for every weblog that you want delivered to your device. That's understandable if you look at Amazon's expenses, but it's astonishing for something that's free on a PC. What's worse, the most enthusiastic readers -- the people most likely to buy Kindle -- are the people likely to be scanning 20 blogs a day. They won't pay $20-$40 a month just to read blogs.

One workaround would be to subscribe to an e-mail blog aggregator like Feed Blitz and have it send a daily digest to your Kindle. That'll presumably cost 10 cents a day -- $3 a month, for unlimited blogs. That is, assuming Amazon doesn't put a size limit on the messages sent to Kindle.

The relatively closed nature of Kindle has led to some angry commentary on ebook enthusiast sites that you'd expect to cheer the product. For an example, there's an essay on Mobile Read here.


Self-publishing: Nice idea, but...

I was delighted to see that Amazon is allowing authors to self-publish e-books for the Kindle. You just submit them to the Amazon Digital Text Platform, set the suggested price, and Amazon adds them to its catalog (link).

The catch is that Amazon pays you only 35% of the suggested price of the book (link). They keep 65% -- for the amazing service of adding your book to their catalog (basically, they shift some bits around on a server). And by the way, if there is any bad debt, Amazon doesn't pay you any royalties at all on that sale, even though they're the ones who failed to collect.

By comparison, Apple takes 30% of iTunes revenue, and NTT DoCoMo takes about 11% of revenue from content and apps sold over its network.



I'd love to hear from the folks at Amazon if there's a reasonable business justification for keeping such a huge cut of self-publishing revenue, but I think it's probably for two reasons:

--Amazon is greedy, and/or

--They don't want to completely undercut the royalty structure of print publishers (who typically pay up to 15% royalties on a printed book)

Either way, Amazon's royalty structure is outrageous. And it won't last. One of the most important aspects of electronic publishing is its ability to change the wretched economic structure of the industry so authors get the majority of the revenue for their work (I've written about the economics of it here). The change is inevitable, and if Amazon tries to hold its current royalty structure it'll eventually just drive people to other e-book platforms that don't rip off authors.


Will it succeed? It's the content, dummy.

All of the issues covered above will affect the success of Kindle, but ultimately the sales of an ebook reader depend on having a huge library of reasonably priced content -- books and periodicals. Lack of sufficient books is what killed the last generation of ebook readers, Rocket eBook and Softbook (I worked at Softbook for a short while, so I saw the situation there first hand).

Judged by that standard, Kindle is off to a surprisingly mediocre start. There are some promising signs. For example, people don't like paying hardcover prices for intangible ebooks, so Amazon is pricing current best-sellers at $9.99, compared to about $15-$16 for hardcover. There are hints in some articles that Amazon is even subsidizing some books to hit this price. The price difference isn't big enough to make people buy Kindle, but it helps to overcome resistance. Good move.

The problem is in the library of other books. Or I should say the non-library. There are supposedly about 90,000 books available for Kindle currently, which sounds like a lot but actually makes for a poor selection. To get an idea of what was available, I took a quick look at the titles available from several prominent science fiction authors -- Niven, Brin, Asimov, Simak, Vinge, etc. (hey, I work in the tech industry, that's what I read). The selection is quite bad -- for many authors, the only Kindle editions are their second-rate books. Or there are a bunch of individual short stories available for 99 cents each, but not most of the novels. I strongly suspect that Amazon is counting each of those short stories as one of the 90,000 "books," because they are all labeled as books in the website. If true, that means the actual number of real books for the device has been heavily exaggerated.

Try the test yourself -- go to the search page here and type in your favorite author's name. Let me know what you find. Maybe fields other than science fiction have a better selection. I hope so.

There's nothing that makes an ebook customer angrier than paying $400 for a device and then finding that most of the things they want to read on it are not available. The iPod succeeded even though a lot of songs were missing from iTunes at first -- but remember that people could rip their own CD collections, and install MP3s for free. Amazon doesn't have a base of content that its users can shift to the reader, and it charges money for any document transferred to the device. So it has to fill the library on its own, quickly.

I think Amazon has a lot of work to do here.

I'm intrigued that about 16 newspapers and magazines are available for Kindle. Unlike books, newspapers and magazines are viewed as disposable, so people are less resistant to buying them electronically. And getting instant delivery of a weekly magazine is a significant advantage over waiting a few days for it to appear in the mail.

Judging by Amazon's price to receive the San Jose Mercury News (Silicon Valley's Incredible Shrinking Newspaper) on Kindle, prices are about 40% less than print subscription. That's not bad. What I don't know is whether the Kindle editions of the papers and magazines will be the full text of the print version, or just excerpts. If anything's left out, people will be turned off.

Amazon must get a critical mass of content -- meaning a lot more magazines and newspapers, and rapid growth in books. If it can do that, Kindle may finally jump-start the ebook industry. It won't explode overnight, but Amazon has a long history of forcing its investors to wait years for the full payoff on investments. If Amazon can maintain that patience, I think it Kindle has a chance.

But I sure hope they make the next version of it look nicer.

Palm Foleo: It's a PC, dummy

Wow, what an interesting day this was in the mobile and web world:

--Apple hinted that it will allow third party developers to add applications to the iPhone, potentially overcoming one of the device's biggest shortcomings (link).

--Google announced Gears, an open source project to enable web apps to work offline -- injecting Google into the growing effort to make PC operating systems irrelevant, and linking Google with Adobe (link).

--Livescribe previewed its pen computing device, the latest in a long series of efforts to turn Anoto's pen sensing technology into a commercially viable product (Livescribe link, Anoto background).

And oh yeah, Palm finally announced Jeff Hawkins' secret project, the Foleo.

A lot of the online commentary on the Foleo hasn't been enthusiastic. Engadget called it the "Foolio" (link). Ars Technica's article was headlined, "Palm officially out of ideas, debuts 1990s palmtop concept" (link). The discussion on the Palm Entrepreneurs Forum (an e-mail list for Palm application developers) was more balanced between admirers and detractors, but even there a lot of people were very lukewarm.

I think a lot of this is Palm's fault. They're trying to position the Foleo as a "mobile companion,"* a device that smartphone users can carry with them when they need a keyboard and bigger screen. In other words, it's for a small subset of the smartphone market, which itself is a small subset of the phone market. A niche inside a niche. The Stowaway keyboard folks should worry.

But I don't think the Foleo really is a "mobile companion." Back when I started to work at Palm (before the turn of the century) one of the old veterans of the company pulled me aside and passed along a little wisdom. "Michael," he told me, "Ya gotta think in terms of real estate. If you're in another device's real estate, you're competing with that device. Palm lives in your pocket; it competes with other things that go in your pocket. If you get bigger than the pocket, you're living in the briefcase, and you're competing with the notebook computer."

Foleo lives in the briefcase. It's displacing the notebook computer from your bag. I don't care what they call it, I don't care if Palm fully realizes it yet, but the fact is that Foleo's a notebook computer.

More to the point, Foleo is the most significant new consumer PC platform introduced in the US since the Macintosh. All you Linux heads who have been asking for a true consumer Linux PC, you finally got your wish.

Wow. That's kind of cool. It may be crazy, but it's a craziness I like. Palm has reimagined the PC for the wireless Internet era, simplifying and stripping away everything they thought was no longer necessary. So since most people carry a phone, you use the phone as your wireless modem. The device also has no hard drive. Since everything is stored in flash RAM, you never actually shut it down -- you just turn off the power, and when you turn it on again all your data and apps are still there, waiting for you. This is normal in a handheld, but it's long overdue in a PC.

"Desktops and laptops were too large, expensive, complex. You're not going to build billions of these complex machines, you build mobile computers....But it became clear the smartphone wasn't going to fill that role....You need a full size screen and keyboard." --Jeff Hawkins, quoted in Engadget

How well will the Foleo sell?

I don't know. It's not the product I would have built (my long wait for an info pad continues). The most successful mobile devices in the last decade have been specialized products that solve one problem for one type of customer -- iPod plays music for entertainment hounds, GameBoy plays games, BlackBerry does e-mail, Palm Pilot does your calendar, etc. The Foleo flies in the face of that. Although Palm talked a lot about e-mail today, the device also has a browser built in, and clearly has ambitions to be a general-purpose computer. I think we should judge Foleo on those terms, not by measuring it against other products we all imagined or wanted. Here are a couple of quick thoughts, and I'll probably post more in a few days after I've had more time to think about it...

Palm can now succeed even if Treo fails. Palm implied that the Foleo will be able to work with any smartphone, not just the Treo. This potentially gives Palm a larger market, and also sidesteps the operators, since Foleo can be sold through consumer electronics stores. Palm execs have been very public in saying that they are happier selling through retail rather than through operators, so today they must feel a little bit liberated.

Beware the Windows CE factor. I have seen many products very similar to Foleo fail over the years, and that worries me a lot. For years Microsoft and the Windows CE hardware companies produced a series of sub-notebooks that looked eerily like the Foleo. Like Foleo, you were supposed to use them to do light browsing and e-mail. They all died quickly, mostly because they looked so much like Windows that people expected them to run Windows apps. When people didn't get the full Windows experience, there was an immediate backlash.

Foleo's a little different because it doesn't pretend to be any flavor of Windows. But the hardware design looks an awful lot like a Windows PC, and that's going to create the wrong impression. Maybe Foleo looks nicer in person, but in the photos it looks like an anonymous gray box, disturbingly like a Dell subnotebook. It doesn't seem to have the lust-inducing look of the Treo 600, let alone the Palm V. I wish they'd made the case more distinctive, or at least a different color, because then people might expect different things from it.

Success probably depends on the apps. Like other PCs, Foleo doesn't do all that much out of the box. It apparently comes with Documents to Go (a well respected suite of Office apps, ported from Palm OS), an e-mail client, and a browser. That's all nice, but it's definitely not enough to make me put down my notebook computer. I think Foleo will eventually live or die based on whether it attracts a lot of third party applications that do interesting things you can't do with a notebook PC.

Palm has been evangelizing a number of developers to create apps for Foleo, but for some strange reason it excluded them from the Foleo announcement today. Instead, the announcements are going to be dribbled out one by one over the next few weeks and months. I presume the idea was that they'd create a sense of momentum, but I think instead what Palm did is make today's announcement less impactful than it could have been.

That means we haven't heard the full Foleo announcement yet. There's more to come from the third parties. We won't be able to really judge the device until we see the totality of what it'll do at launch.

My bottom line, based on what I know today: As a standalone mobile data device, the Foleo is uninspiring. As a potential challenger to the notebook PC, I want to believe, but the proof will be in the third party apps.

_______________

*By the way, the term "mobile companion" is perilously close to "PC Companion," one of Microsoft's early terms for Windows CE devices. The phrase gives me hives, but I think that's just me.

Sprint to Hollywood and Silicon Valley: Drop Dead

Okay, that's a deliberately provocative headline, but I was very surprised this week when Sprint gave more details on the rollout plan for its WiMax high-speed network. Keep in mind that Sprint's counting on support from the technology and content industries to help make its network successful. They want lots of new devices and lots of new services to drive usage of mobile WiMax.

So, what are the first nineteen cities where Sprint's rolling out WiMax?

There's Chicago, Detroit, Grand Rapids, Indianapolis, Kansas City, Minneapolis, Baltimore, Boston, Philadelphia, Providence, Washington D.C., Austin, Dallas, Denver, Fort Worth, Portland, Salt Lake City, San Antonio, and Seattle.

Let's see, what's missing? Oh, yeah -- the country's two biggest cities, New York and Los Angeles. Plus Silicon Valley.

Hey, I'm sure there are good reasons for the choices Sprint made. I'm delighted they're covering five cities in Texas, and it's great that the critical Rhode Island market will be nailed. But if it's essential to the success of your network that you get support from the tech and entertainment industries, wouldn't you make it a priority to let people use that network in the capitals of those industries, Hollywood, New York, and Silicon Valley? I mean, Portland's a wonderful place, but if I were trying to pick a city on the North American west coast that has tech and entertainment industry presence, I'd rank it just above Ensenada and Anchorage.

So I don't understand what Sprint's doing. I want to root for them, because I like the story they tell about their future business model for WiMax, but they're making it hard to love them.

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A couple of other tidbits worth mentioning:

HTC, say it ain't so. Jason Dunn of Pocket PC Thoughts is blogging about CTIA for Microsoft. He says HTC hinted that its upcoming Advantage product will be priced at about $800. Advantage is very interesting technologically -- it's a Windows Mobile mini-tablet, a little larger than a handheld, and could make a very nice info pad. But the right price point for that product is $299. At $800, Advantage is going to be compared to low-end laptops, and it's vastly less powerful and capable than they are. I'm very concerned that if Jason's price information is correct, HTC is going to produce yet another tweener product that'll delight no one and give the info pad form factor a bad name. I love the way HTC is experimenting with different hardware designs, but I wish they'd be more clever about the target markets.

An alternate explanation for the reported collapse of Web 2.0. Venture capitalist Peter Rip reports that Web 2.0 as an idea must be falling apart because traffic to two major Web 2.0 commentary sites, GigaOm and Tech Crunch, has been dropping since late 2006. Peter makes some other very interesting points, in particular on the difficulty of moving Web 2 from a tool to a platform. But I'd like to suggest an alternate explanation for the traffic decline he noted: Maybe those websites have just gone stale. Magazines go through cycles -- for example, in business magazines Forbes was pretty interesting in the1980s, while Fortune was dry as day-old toast left by the side of the road in Arizona. Today their positions are reversed. I think the same sort of cycles are likely to happen in websites, and may be even more frequent, because so many sites depend on a single author who could easily burn out or get distracted.

Is this the beginning of the end for RIM? Maybe not now, but... Richard Windsor of Nomura, one of my favorite financial analysts covering the mobile market, just issued a scathing recommendation to sell RIM stock.

"In order to see further upside we think RIM needs to ship around 1m Pearl devices per quarter to consumers outside of its traditional channels. We have seen no sign of these shipments."

Basically, he's arguing that RIM's dominance in the business communicator market has already been factored into the stock's value, and that to see a lot of upside it has to grow substantially in the consumer market.

I'm not as pessimistic about Pearl shipments as he is -- the early word in the industry was that Pearl was selling extremely well, although it's almost impossible to get reliable figures on phone sales. But I think he's right directionally, even though it's for the wrong reasons. The real question for RIM isn't whether it can break into the "consumer" communicator market, because there's no such thing. There are just communication users, and they use the same devices for both work and personal use. Those people make up about 12% of the population. At some point, between sales of RIM and Treo and all the copycat communicators coming to market, that segment's going to saturate, and RIM's growth will come to an abrupt halt.

The trick is predicting when it'll happen. I don't have enough data to make that call. If anyone wants to invest about $50k in some quantitative research, I could find out. ;-)

Think more creatively about new forms of telephony. Dean Bubley wrote a nice article on possible future uses of voice technology. His point, which I agree with strongly, is that we're paying too much attention to VOIP as a replacement for conventional phone calls. It's important, for sure, but the most interesting change in voice communication is likely to be the integration of voice conversations into lots of different web services. Talking will just be one of the things you do on web sites and online communities. You won't think of it as a phone call, but it'll displace traditional calls as surely as that Vonage handset on somebody's desk. The only difference is, most of the industry won't see it coming.

As they used to say in war movies, "the bullet you don't hear is the one that gets you."

After the death of the album. The mainstream media seems to be finally waking up to the main impact of the iTunes -- it enables people to buy singles instead of albums. That's a financial disaster for the record companies, because they can no longer force people to pay $14 to get the one or two songs they actually want. But I can't see how it is anything but good news for consumers.

Please excuse me if this sounds like bragging, but this trend is what I predicted last year when I looked in detail at the economics of music distribution on the Internet. In that spirit, here's what the newspapers will be reporting in another year or two: more and more new acts will be bypassing the record companies and using iTunes as their music publisher. This will let them keep about 65% of their revenue, rather than under 15%, enabling them to make reasonable money on a relatively small fan base. I believe Apple's fate is to become the music publisher of choice in the US, but the iPod installed base has to grow some more before it'll happen.

Jeff Hawkins will show the new baby in May

In case you missed it, there's a long interview with Jeff Hawkins of Palm over on PalmAddicts. In the interview, Hawkins hints very strongly that he'll show the company's new "third category" device in May.

"We’re going to be announcing something…but I won’t tell you what it is…we will be launching this year, not in the distant future. I’ll give you a much bigger hint: I’m going to be speaking at Walt Mossberg’s D Conference in May. It’s a high-end industry conference. Anyway, I’m going to be giving a talk there, and that would be something for the Palm fans to keep a close watch on."

That should be enough to get the rumor mill cranked up again.

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By the way, I apologize for the shortage of posts recently. I had the opportunity to work on a couple of papers with Prof. Joel West of San Jose State, discussing the iPhone and some other interesting subjects. They ate into my blogging time. I'll let you know when the papers are available.

Joel has an interesting blog on open strategies. It's worth checking out.

Reading between the lines on patents

A reader sent me a note asking if I had seen the thread on Treo Central discussing some patents Palm received on mobile devices with folding screens. Several people have been speculating online that this design might be the new category of device that Palm's developing.

The product designs depicted in the patents are intriguing. They show a device that looks like a mobile phone:



...but opens to reveal something that looks, well, almost exactly like I've always imagined an info pad would look:



There's a flexible screen on the inside, so you get one continuous writing or viewing surface when the device is opened.

Alas, the patents tell us almost nothing about what Palm might be developing today. If you look carefully, they were filed in January 2001, when Palm had a completely different senior management team.



Some of the inventors don't even work at Palm anymore. Frank Canova is mentioned in one of the patents. He was head of advanced technology at the time, but left the company in 2002. Rich Gioscia is on several of the patents. He was driving industrial design at the time, and is still with the company.

The patents can't be early prototypes of Jeff Hawkins' secret project, because he was not working at Palm at the time. It is possible that the ideas filed for by Canova and Gioscia and the others were incorporated into Hawkins' project, but it's just as possible that the patents represent an old idea that the company abandoned years ago.

This sort of thing often happens with patents -- many tech companies pay bonuses to their engineers to file for patents on almost anything they can think of, because patents are used like trading cards in industry negotiations. It's helpful to have a big collection of them. Even if a patents was for a real product that was being developed at one point, by the time the patent's granted the company may have changed its plans completely.

But I will say this: I want that folding device so badly that it makes my teeth hurt.