Now theyre being targeted by the likes of Sony and startup OQO, who are offering their own diminutive computers for businesses.
But Microsoft and partners—the UMPC has been backed by Intel and VIA Technologies—expect to see more diversity in the UMPC space in the near term.
New manufacturers will bring forth additional usage models and design improvements such as integrated, drop-down keyboards and built-in wireless wide area networking, while also driving down prices.
“Youll see an additional wave of UMPCs available in the holiday timeframe,” said Mika Kramer, head of Microsofts new Windows Client Mobility Marketing Team, a group within its Windows Client Product Marketing Group in Redmond, Wash. “We are seeing a lot more Tier 1 players get a lot more interested in releasing the UMPC.”
Microsoft has been working with some of those partners to help lower prices and deliver machines in different shapes, styles and colors.
Theres room for designs that target women or teenagers, while others might aim for a business-oriented crowd, according to the software maker.
Meanwhile, Microsofts forthcoming Windows Vista operating system, scheduled for January 2007, will also offer more functionality for UMPCs, and Microsoft will continue updating its Touch Pack or UMPC-specific application bundle, she said.
“Youll definitely see form factors change in the Q4 , Q1  timeframe. Youre going to see integration of different IDs [industrial designs]…and incorporation of keyboards in some machines,” Kramer said.
“I think itll be characterized by new entrants in the market. Youll see incremental improvements as time goes by.”
Kramer declined to say who might join the UMPC space. Asus, a well-known Taiwanese computer maker, will join this summer, however.
Its 2-pound R2H will offer a 7-inch screen, an Intel Celeron processor and will sell for about $1,000, a company representative told eWEEK recently.
Microsoft will get help from chip makers. Intel, for one, has previewed a low-voltage Core Duo chip that will arrive this summer. VIA Technologies plans to deliver “John,” which combines its C7-M processor and VX700M chip set in one package, allowing manufacturers to create very small motherboards for notebooks or UMPCs.
But price, above all, will remain a factor in stimulating demand for UMPCs, analysts said.
“Originally, the concept of the UMPC was to go after consumers, create a new category and attract them with a low price,” said Richard Shim, an analyst at IDC in San Mateo, Calif.
But “when we look at the first couple of devices … wheres the low price?”
Indeed, the first brand-name UMPC to ship in the United States, Samsungs Q1, starts at $1,099.
Samsung has positioned the Q1, which is being sold by Best Buy, as a device that can work for both consumers and businesses. Business workers could use the Q1 for keeping track of e-mail and viewing Microsoft Office documents while on the road, Samsung said.
But for about the same amount of money or less, a lightweight laptop could do the same job, analysts say.
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 yet—they 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.
“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.
Although systems wont drop down to the $500 range—a price point at which firms such as IDC say UMPCs need to hit to find mainstream success—theyll be well below $1,000, Kramer indicated.
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.
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.