Mobile minitablets still grounded despite new tech

PDAs (personal digital assistants) are pretty much dead; smart phones are the domain of the cellular industry; and the newest push, the ultramobile PC, hasn't met with much early success. Of course, new technology isn't always embraced by the masses, especially when it's expensive and people don't understand why they need it.

Intel, one of the primary backers of the concept, is undeterred. Two weeks ago in Beijing, Senior Vice President Anand Chandrasekher took the wraps off the company's latest chips for UMPCs and outlined a newer product called the Mobile Internet Device (MID). He also revealed plans to use Intel's next generation manufacturing technology to build a chip that sips electricity, a must in any battery-powered mobile device.

But Intel's vision of the UMPC seems tied up with its push behind WiMax, a broadband wireless Internet technology that is still in development despite a high-profile commitment from Sprint. Mobile devices aren't really mobile if they won't work 100 feet outside of a Wi-Fi hot spot. Mobile devices like Samsung's BlackJack or Palm's Treo use cellular networks for data, and although Intel's partners plan to add that capability in later versions of the devices, it adds cost and complicates distribution.

Yet, mobile smart phones are precisely where Intel's eyes are trained. "When you look at the high end of the smart-phone category, that will likely get replaced by the UMPC," Chandrasekher said in comments after his keynote speech in Beijing.

A lot of dominoes will have to fall in the right places for that to happen: Intel will have to deliver its low-power chips, get its hardware partners to build compelling devices, convince developers to write software with a mobile experience in mind, and figure out a way to deliver an always-on Internet connection. And the final product has got to cost around $400.

The early iterations of the product aren't there yet. Samsung's Q1 was considered one of the better models, but that device failed to sell even 100,000 units, an executive said in March at the CeBit technology exposition. That's not even a blip in a worldwide PC market of almost 240 million units a year.

The Q1 costs around $1,000, and that's simply too much for something that's designed to be used as a supplement to both a PC and a cell phone, said Samir Bhavnani, an analyst with Current Analysis.

"If it's a secondary device, it cannot cost more than the primary device," he said. The average price of a laptop has fallen below $1,000, and even ultraportable laptops that a UMPC could conceivably displace don't cost too much more than that.

As with many things in the technology world, price is something that comes down over time. Intel and its partners think they can get the price down to around $700 this year, and about half that by 2009, said Roger Kay, an analyst with Endpoint Technologies Associates. "In the middle to low hundreds (of dollars), people say, 'OK, I'll give this a try.'"

Successful UMPCs or MIDs (or whatever name eventually sticks) will also need to come with compelling features, performance and usability. In 2008, Intel will release a chip based on its 45-nanometer manufacturing technology, called Silverthorne, that will deliver much more performance at a fraction of the power consumption of McCaslin, the product introduced at the last Intel Developers Forum. So on that score, there should be plenty of processing power for video entertainment, PowerPoint presentations and e-mail--the essentials for a highly mobile professional or consumer.

On the software front, Microsoft has been one of the biggest proponents of UMPCs and minitablets, which are part of its Origami project. But its might and muscle haven't helped sales of the devices, either. And Intel thinks that Windows Vista's code base might be too large to run effectively in an environment where power consumption is everything.

"We're working closely with Microsoft. They know what they need to do," Chandrasekher said in response to a reporter's question, after his keynote speech, about whether Microsoft and Intel are developing a stripped-down operating system that's somewhere between Vista and Windows Mobile. But Intel is also hedging its bets, announcing plans to promote Linux-based MIDs in 2008, based on its Menlow platform.

Microsoft didn't respond directly to questions about future plans for mobile operating systems or Intel's support for Linux. "We believe in the promise of the ultramobile form factor and the unparalleled strength of the Windows ecosystem. We'll continue to innovate with our hardware partners--including Intel--so people can stay connected, entertained and organized at the touch of a finger," Microsoft said in a statement.

Smart phones just aren't meant to browse the Web or work with documents the way that UMPCs are, he said. "A phone is used predominantly for voice calling. It's not designed for data-oriented applications," Chandrasekher said.

However, UMPCs aren't designed to make phone calls, which could be a serious problem if the goal is to compete with sleek smart phones. "You're not going to hold this ham sandwich up to your head," Kay said.

Sure, you could use voice over Internet Protocol software like Skype over a Wi-Fi connection with a Bluetooth headset, as long as you don't wander too far from the access point. Wi-Fi's bigger cousin--WiMax--will start to offer true metro-area mobile broadband in 2008 through Sprint's WiMax project. But it took much longer than a couple of years for the cell phone industry to build widespread high-speed cellular networks in the U.S.

And although Chandrasekher said Intel would include chips--for connecting to cellular networks--into future versions of its technology for MIDs, it's not clear when that will happen or whether mobile carriers would allow that to be a locked or unlocked device.

Stephen Baker of the NPD Group doesn't think voice is what will hold back the UMPC. "People are willing to carry multiple devices if those devices carry a specific feature that it does pretty well. You could get a relatively cheap cell phone to use for voice, and get one of these for Web surfing," he said.

Of course, Apple is about to make a substantial bet that people do want the all-in-one device. The iPhone's imminent arrival has been arguably the talk of 2007. The product is a blend of a video iPod, a handheld mobile Web browser, and a phone.

And other smart phone companies, from Motorola to Palm to Samsung, will no doubt continue to improve the data capabilities of their products while carriers upgrade their cellular networks to faster speeds.

The biggest problem with the UMPC concept is the perception that it's a product in search of a market, a common refrain from analysts and bloggers. It's still not clear what will convince the public to start demanding this type of product. It could be Web surfing, entertainment options, wireless e-mail, gaming, or something that hasn't even been envisioned yet.

"They've got ideas--I'm just not sure how they are going to get implemented," Baker said. In the meantime, the PC industry will continue to try to find a way to augment maturing PC market sales by breaking into the mobile market.

"Just like everybody else, they look at the cellular business (one billion units a year and counting) and say, 'If I could sell five million, I'd be in hog heaven,'" Baker said.