Will Microsoft's New 'Ultra-Mobile' Computer Fly or Flop? Past Experience Offers Some Clues

Although Microsoft recently unveiled an 'ultra-mobile personal computer,' or UMPC, in a move to fill a market niche between laptops and handheld computers, it remains to be seen whether this latest innovation from the software giant will be a hit or flop.

By No Analyst or Consultant

March 30, 2006 — CSO —

Although Microsoft recently unveiled an 'ultra-mobile personal computer,' or UMPC, in a move to fill a market niche between laptops and handheld computers, it remains to be seen whether this latest innovation from the software giant will be a hit or flop. While Microsoft is following a "build-it-and-it-will-sell" strategy with the UMPC, technology history is littered with innovative products that never found a market, say experts at Wharton. As Wharton professor of operations and information management Eric K. Clemons puts it: "Build-it-and-it-will-sell strategies are a mixed bag."

Regardless, the initial reaction to the UMPC, announced by Microsoft on March 9, will become clear in just a few months. The first UMPCs small computers with 7-inch screens that are designed to occupy a niche for consumers who want a device larger than a handheld yet smaller than a laptop are expected in the second quarter ending June 30 from electronics manufacturers such as Samsung, Founder and Asus. UMPCs, priced between $599 and $999, promise to run all the applications that a Microsoft Windows desktop computer does.

On the plus side, products like cell phones and the iPod didn't initially strike consumers as must haves, but became big hits. On the other side of the ledger, products like Apple Computer's Newton, a handheld computer that debuted in August 1993, was a commercial flop in large part because its handwriting recognition software didn't perform well. Microsoft, for its part, has attempted to create new categories of computers before, as with its Tablet PC, which analysts say has yet to be a big seller beyond select industries such as health care and financial services. However, even commercial flops can be deemed a success if they blaze a path to new categories of products. For instance, Apple's Newton was an early disappointment, but forged the way for handhelds like the Palm Pilot 1000, launched in March 1996.

So what will be the fate of Microsoft's UMPC, formerly codenamed "Origami"? According to Clemons, there is potential for the devices, but he won't know how much until he gets to play with one. Kendall Whitehouse, senior director of advanced technology development at Wharton, says the UMPC is a good way for Microsoft to spread its software into all forms of devices as they begin to converge. Wharton marketing professor Eric Bradlow suggests that Microsoft has a sales challenge convincing consumers they need another device that is a "tweener" between a laptop and a handheld. Jagmohan S. Raju, also a Wharton marketing professor, predicts that the UMPC will have a tough time competing due to its high price. And Robert Shelton, co-author of Making Innovation Work (Wharton School Publishing), describes the UMPC effort as another attempt by technology companies to use innovation to create new markets by finding just the right mix of size, functionality and price.

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