JooJoo Issue Suggests 3 Pitfalls for Apple, Microsoft Tablet PCs

Tech startup Fusion Garage has announced the debut of the JooJoo, a 12.1-inch tablet PC designed to surf the Internet. The device will be released on Dec. 11 under a cloud, however, with Michael Arrington—founder of popular technology blog TechCrunch—threatening to sue Fusion Garage over what he says is the theft of his design for a tablet PC.

Arrington insists that neither TechCrunch nor Fusion Garage owns the intellectual property related to the CrunchPad, that the two entities shared development costs and staffing, and that Fusion Garage CEO Chandra Rathakrishnan abruptly tried to shut him out of the development process on Nov. 17.

"Chandra said that based on pressure from his shareholders he had decided to move forward and sell the device directly through Fusion Garage without our involvement," Arrington wrote in a TechCrunch blog post Nov. 30.  

But Rathakrishnan insists that he came up the concept for a cheap tablet PC capable of surfing the Internet, and that Arrington failed to deliver on any hardware, software or funding promises. "[Fusion Garage] did the hardware. We had made the software. And we secured the funding," Rathakrishnan said during a Dec. 7 Web conference, according to a Los Angeles Times blog post.

But Fusion Garage may face a bigger issue than an irritated Arrington: the possibility that only a very narrow subset of customers will actually pay $499 for the touch-screen device. Should the JooJoo crash and burn, it could provide a cautionary tale for both Apple and Microsoft, which are rumored to have their own tablet PCs in development for 2010.

Here are three reasons why:

Price point

Arrington insists that the JooJoo started life as the CrunchPad, a low-cost tablet PC he planned to debut onstage at the Real-Time CrunchUp event on Nov. 20. In his blog post about the project's demise, Arrington suggested that the CrunchPad would have retailed for around $300.

The CrunchPad was a functional design, Arrington insisted. "It went hours without crashing," he wrote. "We could even let people play with the device themselves—the user interface was intuitive enough that people 'got it' without any instructions."

When Rathakrishnan announced the JooJoo, the price he named was $499. As cited by many online reviews of the product on Dec. 8, that price is higher than those of many netbooks currently on the market that offer functionality in addition to simple Web browsing—a fact that could make consumers pause.

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