Prices Must Come Down
Ultimately, "they have a long way to go to get [the UMPC] to $500," Shim said. "With a new device like this it helps to have a focused, targeted audience, and they dont have it yetthey started with consumers and are now looking to appeal to businesses. Then you look at the value proposition, and its still too expensive." Microsoft is doing its part to help drive UMPC prices down in time for the 2006 holiday season while also fostering things like increases in battery life and working harder to spell out what it says are the benefits of UMPCs, Kramer said.Although systems wont drop down to the $500 rangea price point at which firms such as IDC say UMPCs need to hit to find mainstream successtheyll be well below $1,000, Kramer indicated. To read more about the rise of inexpensive, ultraportable notebooks, click here. During "Q4 we wont have all of those things solved. But were going to see a significant improvement," she said. But between then and now, the UMPC is likely to face greater competition. Sony, for one, intends to begin shipping its UX series, a sleek 1.2-pound "Micro PC" with a 4.5-inch screen, in July. Meanwhile, OQO, the startup famous for offering a 14-ounce portable computer with a 5-inch screen and a hidden keyboard, aims to get more aggressive as well. Both companies are aiming more at the business market than consumers, their executives say. But the devices will all compete for many of the same customers, particularly among those consumers who aim to purchase a lightweight notebook for use at home and work. The OQO Model 01+ and Sonys UX Series both command premiums over the UMPCs. However, in some cases they also bundle more technology. The UX Series, designed for mobile professionals, starts at $1,799. But its price includes a keyboard and WWAN hardware, allowing it to access Cingulars National Edge network, a company representative said. OQOs Model 01+ lists for about $2,099. But the company is looking to grab share over time by lowering its prices and introducing new technology into its computer, said Jay Shiveley, the companys CEO in San Francisco. To read more about planned vertical applications for the Origami platform, click here. Microsoft will respond in several ways. Aside from its work to recruit more OEMs and to assist in reducing prices, it has been working on new UMPC platforms as well as addressing the business market by working with ISVs to deliver UMPCs to certain vertical markets. The software giant is also already working with one smaller follow-on platform under a project it calls "Haiku." Although theres no specific Haiku launch date set, the company is using it to lay out the road map to smaller UMPCs, Kramer said. Check out eWEEK.coms for the latest news in desktop and notebook computing.
"As we see other OEMs sign up to develop or deliver UMPCs, were going to see, I anticipate, in Q4 of this year a significant price reduction," she said.