The UMPC dies. And no one notices.
We just started to like the concept of the UMPC. But the truth of the matter is that the UMPC, at least in the shape we saw these little computers over the past year, will join the Tablet PC in a niche, far away from the eyes of the mass market. The UMPC will disappear from our radar as quickly as it surfaced.
Key slides from Intel's Spring Analyst Forum 2007 ...
Ok, let’s not be so dramatic. It really depends on your view if the UMPC is actually dead or alive. However, the idea of the Ultra Mobile PC as it was pitched to us in 2006, as an ultra cool and always connected companion that is with us anytime and anywhere, is gone for good. Expect the current UMPC generation to leave the general retail market very soon.
During a recent conversation with Intel, which has been one of the first companies to show UMPC concepts and unveil some prototype devices a little over a year a ago, we learned that the initial concept of the UMPC has failed. While the form factor of the UMPC won’t go away, these devices have been less appealing to the mass market than expected and have been redirected to aim at the business market, for example field technicians who use bulky Tablet PCs today. If Intel has its way, then what once was the mass market UMPC will morph into much smaller and less powerful “mobile Internet devices,” short “MID”.
So, if you have been dreaming about that cool little tablet you can bring on vacation instead of dragging that notebook bag along, continue to dream. While MIDs will be more affordable, come in a smaller package and offer more connectivity options than today’s UMPCs, they will be far less capable in terms of processing power and storage capabilities.
If you take a minute to think about Intel’s idea - and Intel thinks that MIDs have a huge market opportunity with twice or three times the volume of the “new” UMPC - then you will notice that Intel is essentially trying to create a new product category, positioned between ultra mobile PCs (such as the UMPC and devices such as the OQO) and increasingly powerful smartphones, which are becoming computers themselves.
One could doubt if there is really room for such a device. Let’s have a closer look.
What the UMPC was supposed to be and what it became
When Microsoft pitched a mysterious Origami device, which essentially became the concept and general understanding of what a UMPC should be, we learned that the industry had a new device in mind that is created to cash in on the increasingly mobile and connected world: A device that may be purchased in addition to the notebook users already own, but that is small enough to fit in a small backpack or purse.
There must have been a slight disconnect between Microsoft’s marketing strategists and hardware and product designers. Neither the first nor the second generation of UMPCs came close to the expectations the initial marketing created.
Instead of an always connected ultra cool device, we largely got underpowered, overpriced, bulky and often battery hungry small tablets that lacked a user friendly interface and ended up collecting dust on store shelves. The most recent UMPC generation shown by Samsung finally has WWAN capability, but comes with an awkward keyboard, which is located on the left and the right side of the screen. There is little innovation in this device and while Samsung has a fantastic 32 GB solid state disk in production, the company decided to put a heavy and bulky 1.8” hard drive into its latest UMPC. Add a price tag of more than $1000 and there is enough reason not buy this second-gen UMPC.
There are several ideas of UMPCs on the market today. Besides the tablet-like devices there are the OQOs, which appeared to have slipped into the UMPC marketing wave by accident, the recently released FlipStart or Sony’s ultra mobile UX computer. None of them have become what we could call a success ore at least carry the potential of a “breakthrough” which Intel originally had predicted for 2007.
Read on the next page: The problem of the UMPC and its replacement: Does it make sense?
The problem of the UMPC
One year after the release of the first UMPC, it appears that no one in the industry really wants to talk about these devices anymore. Intel for example, excluded the term from its presentations to analysts on Thursday completely and has begun talking about MIDs instead. This development is especially interesting, as the company was heavily promoting UMPCs in various consumer scenarios just two months ago at the Cebit tradeshow in Germany. For example, we learned that UMPCs should take on the role of detachable car computers. That is unlikely to happen now.
So, what changed?
Obviously, we are in the midst of strategy shift. The reason: The industry has a lot more data about who is actually buying UMPCs today. Pankaj Kedia, ecosystem manager in Intel’s ultra mobile group told us that 60% of all UMPCs were actually purchased by businesses and the initially targeted mainstream market showed very little interest in this new product category.
Kedia cautioned that every new product category needs time to evolve and that even the notebook needed 12 years to hit sales of 1 million units per year. He explained that a product such as the UMPC will require about two to three years until a supporting ecosystem with supporting hardware and software as well as interest from customers will become significant. However, one could argue that the created expectations outpaced what the industry could deliver at the time and market research clearly missed what customers the UMPC could attract.
In fact, the discrepancy between product design, marketing and customer expectations may have been the ultimate reason to scrap the original idea of the mainstream UMPC altogether. While customers would expect a $500 UMPC that runs Windows Vista’s AeroGlass interface just as fast as dual-core notebook, a permanent connection to the Internet, a GPS navigation device, a slim solid state disk and a battery time of eight or more hours, the hardware and software of 2007 just isn’t there yet – and isn’t likely to get there in the foreseeable time.
While the marketing departments forgot to ask what is realistic these days and what is not, there appears to be also an issue with UMPC product management. The idea of the UMPC is a fantastic playground for innovation, but it actually is a lack of innovation that we saw over the past fourteen months. There was not a single hardware or software idea that was unique to the UMPC and that could take advantage of this form factor. Instead we saw efforts to simply create a smaller notebook (or a more capable PDA, depending on your view) with no extra benefit but extra inconveniences for the user.
What the UMPC will be
While only the industry knows for sure, the UMPC looks like it has hit dead end. To turn it around, there are two possible solutions: Leave it the way it is and sell in smaller volumes to the users who have been purchasing the first two generations of the products or correct the product design mistakes and offer a more tailored product to the mainstream market.
Intel says it will go both ways. In that sense, the UMPC isn’t really dead. I will have to make a prediction here, but as of now the UMPC feels like the Tablet PC all over again. It isn’t hard to imagine that the UMPC will end up in a market niche and replace the Tablet PC, which once was projected to revolutionize the notebook. Will the mass market care? No. It hasn’t cared until now and will not care then.
For the consumer, it gets more interesting. Intel has MIDs in mind, with a price tag of about $500, much less memory than a UMPC, flash memory instead of a hard drive and a very lean operating system. Intel is currently designing a new 45 nm processor, code-named “Silverthorne” for these devices (and future UMPCs). Silverthorne is said to be about as fast as a Pentium M four years ago and cost about as cost-efficient to manufacture as a 286 CPU.
As a result, Silverthorne will not be able to run Windows Vista, according to Kedia. In fact, the MIDs Intel is currently showcasing are running Ubuntu Linux and not Windows. Kedia said that initial MIDS will definitely be running some version of Linux, but the company is also talking to Microsoft to offer “some” version of Windows for the MID.
As an example for an early MID, Kedia pointed to Apple’s iPhone which is rumored to integrate several Intel components.
Does it make sense?
We will get a mobile device that is positioned below the sub-notebook one way or the other. In a world that goes more and more mobile, and users who ask for permanent Internet connections and entertainment on the go, a MID makes a whole lot of sense.
However, it will be a challenge to differentiate the capabilities of the MID from smartphones that receive more and more processing power with each new generation. With the MID not being capable to run and display Windows Vista - an operating system most users will be used to when MIDs hit the market - it will be difficult to highlight the advantages of the MID and there may not be enough difference to a powerful and similarly priced cellphone.
We do have plenty of pocket sized entertainment devices on the market today – from multimedia cellphones to portable audio/video players. It is a matter of time until someone combines all wireless and multimedia features and the simple addition of an Intel processor certainly does not automatically create a new product category.
Can a MID be successful and will consumers bite this time? Only time will tell, but half-baked products such as Sony’s Mylo were not convincing enough to stir interest from the mass market. As it was the case with the UMPC, a simple shrink of an existing product (such as the UMPC) won’t cut it. The MID will also need an innovative interface and new ideas to generate interest.
Maybe someone should ask Apple for help?
What do you think? Would you spend $500 on a portable device with a 4.5” or 5” screen that is always connected to the Internet and allows you to play casual games and playback audio and video? What do you feel such a MID should be able to do? Join the discussion and write a comment in the form below.