What are consumers to do when their iPhone is too small and their netbook is too big?
Heartened by the success of both products, a range of tech companies are betting that the market has room for a gadget that falls somewhere in between.
Chip leader Intel INTC and Nokia NOK, the world's largest handset maker, last month announced plans to collaborate on a new class of pocket-sized computing devices that would "go beyond today's smart phones, notebooks and netbooks." Neither company has offered many details about planned devices except that they'll be small and always connected to the Internet.
In time, Dell DELL, Hewlett-Packard HPQ, Samsung, LG, Toshiba and Acer will likely enter the category with new products, though what they'll look like or do is equally unclear.
"There is a significant middle ground here (between smart phones and netbooks) that's not yet been developed," said Phil Hendrix, an analyst at consulting firm Institute for Mobile Markets Research. "You'll see a lot of innovation in the next 12 to 24 months."
Max: 3 Pounds, $350
While the product category is still being defined, most analysts see devices that weigh three pounds or less and cost less than $350.
Pankaj Kedia, a director in Intel's Ultra Mobility Group, said developers are focusing on the ways people work, communicate, and seek entertainment.
"There are so many things we do on a daily basis that are moving to the Internet," he said. "Our strategy is to deliver a range of mobile devices that makes it easy for you to do these things on the go."
Kedia said the emerging class of devices would fall into various categories. Some might be highly tuned for video, games and music. Others could enhance Web browsing. Some would target people with specific types of jobs.
"This is not 'one size fits all,'" Kedia said. "We'll see a range of devices. What's coming out now is just Generation One."
Intel has pushed its Atom line of energy-sipping processors, while Qualcomm QCOM, the largest developer of chip sets for cell phones, launched its rival Snapdragon chip last year.
Much of this interest stems from Apple's AAPL iPhone, one of the first pocket-sized devices to let users browse regular Web pages from just about anywhere, analysts say.
The interest in MIDs, or mobile Internet device, accelerated with strong sales of netbook computers, pioneered by ASUStek Computer and Micro-Star International, both based in Taiwan. Netbooks are stripped-down versions of notebook computers and cost $400 or less, designed mainly for Internet access and other basic computing tasks.
"After watching ASUS and MSI surpass expectations, nearly every major PC manufacturer has either introduced or announced plans to introduce their own line of MIDs," Hendrix said.
Netbooks A First Generation
Initially, these products were mainly netbooks and can be considered the first generation of MIDs.
The second generation will "represent a very different class," Hendrix said. Many MID devices will likely have a specific, dedicated use -- think Amazon's AMZN Kindle for reading books and newspapers.
Based on a survey of 250 consumers and professionals, Hendrix expects most MID developers to focus on Web browsing, e-mail, search, navigation and managing calendars and contacts.
Still, predicting market adoption of new products is notoriously difficult, Hendrix concedes.
The first generation of ultra-compact laptops -- which Microsoft MSFT dubbed the ultra-mobile PC -- failed to catch on. They were full-powered computers about the size of a paperback.
While they all featured touch- screens and other Microsoft-mandated features, manufacturers were free to try a variety of designs; the Wibrain B1 split the keyboard in two, for instance, placing each half to the left and right of the computer's display so users could type while holding it.
But the devices were deemed too expensive, around $1,300, and didn't have long enough battery life, analysts say. The concept evolved into netbooks, stripped-down versions costing under $400.
'Greater Opportunity'
"Manufacturers saw greater opportunity and felt more comfortable bringing to market the lower-cost netbooks," said Jeff Orr, an analyst at ABI Research.
ABI expects 35 million netbooks to ship this year, a figure that will rise to 135 million by 2013.
Defining the MID space and its direction is difficult, because computer and cell phone makers often have conflicting ideas about the evolving category, Orr says.
"We have two different forces approaching this field, running at full steam," Orr said.
In the past few years, Nokia has introduced several devices that fit the MID category without much success, analysts say. Among them was the N810 introduced in October 2007.
Described as an Internet tablet, the N810 has a 4-inch color screen, slide-out keyboard, a global positioning system and Internet access via Wi-Fi wireless networks.
"It excited the geeks, but was kind of expensive and was looking for an application," said Paul Jackson, an analyst at Forrester Research.
Likewise, newer MID devices will live or die by how useful buyers find them, he says.
Smart phones caught on because they foster communication, he says. Laptops, meanwhile, let users use a variety of full-fledged PC software.
And MID devices?
"The danger is whether this new (MID) category becomes baffling to consumers," Jackson said.
Source: Investor's Business Daily
