Analyst Opinion - Last week, I was in China and witnessed the launch of the first generation Mobile Internet Device (MID) platform products based on Intel’s new Atom processor. This got me thinking back to what we had before the MID and why some of those products were successful and others were not. Of course, now we can speculate who will be successful with the MID.  

A good part of the MID success will be due to Linux, which has been showcased best in Lenovo’s offering so far.  Lenovo’s product has an interface that looks like an update to what Apple has in the iPod and iPhone. Trying to copy Apple isn’t unusual, but coming up with something better than Apple did is, particularly if we are talking about Linux. I think this is worth talking about.
 

Lessons from the PMC failure

The PMC or Portable Media Center was actually a cool little device for its time.  It played videos in beautiful color long before the iPod did and its interface was one of the best that Microsoft has ever done.  

Unfortunately, PMCs tended to be big, much like the first MP3 players. They lacked an iTunes-like back end (particularly for video which was their one big strength) and the vendors seemed to have the idea that demand generation marketing wasn’t necessary.   A lot of them either seemed to think Microsoft would do it for them (they never do) or that “if I build it they will come” approach applies to tech products (it doesn’t).  

The end result was that, after an initial spike, sales for these devices fell into insignificance.   Although the Archos series (really the best media player almost no-one knows about), the video iPod (now iPod Classic), the current iPod Nano, the iPod Touch, and the Zune are all Portable Media Centers we don’t call PMCs anymore.  All but the Archos have a strong back end and a marketing budget (at least Zune used to have a marketing budget).  

While Microsoft first created the concept of a portable PC connected device that did video well, Apple, for the most part, was the company that made it work and now gets the credit, the related revenue and the profit.   Doing something first isn’t as important as doing something right. Even Apple learned that with the Newton.
 

Looking forward to the MIDs:  Linux’s big break

The first generation of devices are big, much like the first PMCs were big, and clearly won’t appeal to everyone.   On the other hand, size does bring a couple advantages like the ability to integrate a keyboard and a larger screen.  This should make the device better for folks that are more into video than music and want to use these devices as more capable email machines. But clearly, MIDs aren’t a replacement for your iPhone or iPod yet.

However, some showcase Linux very well and the Lenovo version of the device actually sported what looked like a next generation iPod interface.  For nearly a decade, Linux developers have been saying they would create an alternative to Windows and what resulted from that claim was mostly hot air.   In the end, all they had was something that looked like a cheap version of Windows 2000, while Apple took UNIX and actually created something truly unique and many can credibly argue better.
 
Well, if this Lenovo offering is a sign of things to come, then it looks like Linux fans actually do have something to brag about. This is the first time I’ve seen a Linux interface that actually seemed innovative in the way Apple is innovative and does not resemble a poor man’s copy of Windows.  The only thing Lenovo is missing is multi-touch and given you can license that from Stantum, a company that had this technology in the market before Apple did, I expect that this omission will be corrected shortly.  Though I wonder if the reason they haven’t done this yet is due to possible conflicts between the Stantum license and the Linux GPL.   

Think of this first generation as more of a connected GPS/Email device on steroids than an iPhone or an iPod killer. But, just like the MP3 players did, they will get smaller very fast.
 

Could the iPod/iPhone Killer be an iPod/iPhone?

Back to the idea of not doing it first but doing it right first, the race now will be to get a product to market that is better than Apple’s offering before Apple does. If Apple partners with Intel, this product class should drop into the size and power envelope of the iPod/iPhone by H2 2009 and things can get  interesting then.

Apple surely will deny the move from ARM to Intel until they actually have a product and the fact that the company does not roadmap such steps introduces additional risk for developers who depend on long product cycles for the iPhone/iPod Touch platforms.  They probably should plan on designing in some additional flexibility to anticipate a port of their software.  But it is very possible that the real iPhone/iPod killer could actually come from Apple.

In any case, this class of product owes its roots to the Portable Media Center and will depend on how well-cooked the back end services, connectivity solutions, the user experience, and the marketing are in and around these products.   Apple has clearly demonstrated what it takes to do something amazing, and the MID platform has the potential to eclipse anything we’ve been able to do with ARM. Let’s see if anyone has learned this lesson well enough to bring something superior to the market by the end of next year.   

Until then, most of these devices will be Asia only which gives you another reason to go and visit China or Japan later in the year.

Rob Enderle is one of the last Inquiry Analysts.  Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them.  Currently he provides his services to most of the major technology and media companies. 

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