The death of the UMPC? The MID won’t do it.

There is no doubt an article published by TG Daily is going to attract a lot of attention in the next few days, especially since Slashdot has picked it up.  I could have predicted that would happen since it’s a chance for Slashdotters to stick a sharp stick into the UMPC.  The article is interesting because at its core it is about the direction change that Intel is making with its MID (mobile internet device) line of components and devices the chipmaker recently began touting.  The TG Daily author gives a pretty good account why he thinks that UMPCs haven’t taken off in the mainstream, touching on all the usual reasons like size, price, and usability among others.

The Intel MID devices are no doubt interesting, consisting of low-end hardware components to both keep the device cost down and provide better battery life.  It is definitely interesting that Intel is touting some flavor of Linux to run the MID devices.  To get a feel for whether this new class of device will hit the mainstream it’s necessary to take a look at why the mainstream is not snapping up current UMPCs, since mainstream consumers has been the target market since the Origami was announced over a year ago.  The announced target price for UMPCs was pegged at $500, aiming the devices directly at the mainstream consumer and Intel is touting the same price point for the MID. 

I have been playing in the ultra-portable device arena as long as anyone and I don’t think the Intel MID will be the mainstream device that every consumer is going to long for and buy.  We’ve had internet appliances before and the fact is that playing on the web is not the only thing that consumers will want to do with a device they carry with them all the time.  Heck, the Nokia N800 is a great internet appliance and retails for less than $400.  I don’t see any of my neighbors running around with them and the MID will be no different.  You have to understand that I’m not talking about geeks like me when I talk about mainstream consumers.  I buy a lot of gadgets that most people wouldn’t, but then I’m not the target market for these entry-level devices.  The OEMs desperately want to crack the mainstream consumer market who want to walk into Target and buy their device.  The truth is there are a couple of factors that will prevent this from happening.

Microsoft correctly realized back in the Origami/ UMPC early days that the portable computer would need to be able to run all the applications at a consumer’s disposal.  This meant some flavor of Windows so users could interact with all their "stuff".  This will be a big negative factor for the MID because once consumers have one they will realize that unless they are a Linux guru they are not going to be able to interact with their data or media.  If nothing else, mainstream consumers will want to use the device with their existing media, and that means with iTunes and their iPods.  Look again at the Nokia N800, a Linux-based web appliance.  It’s not limited in what it can do by the device itself, rather by what the average user can do with it and that’s not much beyond the intended web usage which it does very well.  But that’s not enough to make the N800 fly off the shelves, even at an attractive price point.  People will always want to use a computer with their favorite programs and using the data they have already created.  That’s not going to happen with the Intel MID, I’m afraid.  So that dictates a "real" computer with hardware capable of running existing programs and operating systems, and that drives up the price dramatically while increasing the power consumption proportionally.  There’s a reason the OQO costs $2,000.

The other factor that will hamper the mainstream adoption of a low-cost portable computer like the MID is connectivity.  Every analysis you see about the ultra-portable computer segment makes it clear that consumers expect to be always connected to the web.  This brings a big impediment to mainstream adoption because it not only increases the cost of the device to put the radios inside to provide this connectivity but it also brings a heavy ongoing price for the connectivity itself.  Even if you could buy a $500 MID device you’d have to shell out $20 – $60 per month for the 3G connectivity needed to make it truly useful as intended.  Mainstream consumers are going to balk at that right from the get-go.  I am convinced that is the reason that wireless device maker Nokia decided to go with WiFi only for the N800.  They know that selling the consumer on an expensive data plan will be hard to do while the public perception is that WiFi connectivity is free.  Of course, it’s a far cry from "always connected", too.  This is a negative impact on adoption of mobile devices that is beyond the control of the OEMs like Intel and friends, and no particular class of device is going to change that.  Imagine Joe Public walking out of Target with his MID to find out that he’s not really connected anywhere unless he ponies up the big bucks for a data plan.

UMPCs are not dead as the TG Daily article implies, even the author admits that.  But he is correct in pointing out that current 2nd generation UMPCs are not going to appeal to the mainstream consumer.  I don’t think that will happen until there is a $500 fully functional PC with a cheap data plan.  It’s all about anywhere access and price.  Two things that for the foreseeable future are mutually exclusive.  It might get interesting if one of the big wireless carriers produces a branded ultra-portable device with data service.  Maybe HTC and T-Mobile teaming up?  Now that would be interesting.