Do you need a computer in your pen?

Livescribe continues to improve the electric pen.

Here is one good reason that I take a ballpoint and a pad of paper to interviews, instead of a PC: so I never have to say to the person I'm talking to, "Wait, let me reboot my pen."

But that's what Jim Marggraff, CEO of Livescribe (site may not be live yet), told me last week when he was firing up a demo of his company's new product, the "smart pen" that he'll be showing off at the D5 conference tomorrow.

A prototype Livescribe pen. The real version will be slimmer, and look less like a toy. CNET Networks

In fairness, the pen he was showing me was a prototype, and I forgive reboots during development. Also, it's a cool product. Like the Anoto pen and Leapfrog's Fly "pentop computer," which Marggraff also worked on, and also like Logitech's io2, the Livescribe Smartpen uses a sensor to record what it writes when you write on special "dot paper," which is ordinary paper with a faint encoded background that the pen uses to know not just what you're writing but on which individual piece of paper. You upload your pen's recordings to your computer when you want to archive your notes and make room for new ones.

The Anoto and Logitech pens are primarily writing recording devices. The Leapfrog pen has some smarts: it can solve algebraic equations that you write, for example, and speak the results. But it's a clunky, toy-like device. The Livescribe pen has smarts, as well as a speaker and an OLED display to tell you about what you're writing, and it's also much smaller and more pen-like. The most useful feature, though, is this: you can take notes and have the pen record audio at the same time. Later, after you've downloaded your pen's files to your PC, you can select text and get the audio that the pen was recording at the moment you wrote it. (I've used a similar feature in OneNote, but it requires you write or type on a PC.) Bonus geek feature: the pen comes with in-ear binaural mics for recording audio, so playback of a professor's speech should come through clearly (along with your swallowing and breathing, but what price education?).

How dot paper works. Livescribe

There's not a ton of Web 2.0 in this product. There will be a site for storing written and audio notes, and you'll be able to share your recorded writing, including audio and animation, with others. The site will also be used as a market for applications written on the Livescribe platform. Another clever idea: you can give people business cards printed on dot paper, and if they have a Livescribe pen they can send you a note simply by writing on the back of the card. When the pen connects to its PC software, the note will be transmitted to the card's owner. As Marggraff said, when a person writes on his business card, "Those are my dots."

The security ramifications of the "my dots" statement is terrifying (how do you know, for certain, whose dots you are writing on?), but it is a clever idea. It does require that both parties in the communication be Livescribe users, though.

The pen should sell for "under $200," and thankfully, Marggraff does not plan to gouge users on paper prices. Rather, he hopes developers will create new applications using the Livescribe platform, and that his company can make money by supporting that infrastructure. This is a risk, but so is selling pricey paper. Even though paper looks like a better business model, the concept of the electronic pen is so weird that Marggraff needs every advantage he can get in the consumer market. Selling expensive paper on top of a $200 electric pen would slow things down.

I'll give this gizmo a try when it comes out, and we'll see if it becomes a part of my reporter's toolkit.

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