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Update: Origami prices expected to be $599-$1000 in six months–and screen res will be 800×480
March 9, 2006 | 8:12 am
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By David Rothman
“Current prices are hovering around $1000. Intel and Microsoft are targeting a $500 price range within the next couple of years to increase the Origami’s user base.” – Ubergizmo item.
Update, 11:55 a.m., March 9: Some hope! I see from a video interview that Microsoft is still saying that “the price range we expect to see is in the $599 to $999 range” and will come down from there. $599 isn’t $500, but it’s still better than $1,000. The $599 is the word from none other than Otto Berkes, the machine’s chief architect, shown here. Did a journalist earlier confuse the initial prices of the Origami-class devices with those of current Tablet PCs?
Other details: Normal res on a seven-inch screen will be 800X480. But with a little distortion, you can run the built-in display at 800X600. Nice enough. Could e-book software or fonts even be designed to adjust for the Origami’s quirks? Processor will run at a gig and OS will be XP Tablet edition. So, yes, you’ll apparently be able to use any XP-compatible software you want, including the e-book variety. Battery life will be three hours, but Microsoft expects improvements, as well as option to extend it. Mass storage should be anywhere from 30G to 120G, depending on the model. Bottom line: You should be able to carry around a whole bunch of Gutenberg libraries.
Update, 7:04 p.m.: Robert Scoble, Microsoft blogger, tells me that, yes, prices should be down to $599 or so in six months, based on what Otto Berkes says. The econo-models just aren’t the first. Six months is much sooner than the two or so years that some thought that $500 might take. As I see it, with Intel involved and able to do things at the chip level, many more resources could be bought to bear to drive down prices. By the way, new Toshiba Tablet PCs at times have sold for as little as $850. I expect similar flexibility in Origami prices.
Related: Jon Noring’s comments on pricing of handheld computers. Seattle Times article that talks about a $500-to-$800 price range without spirit-sagging words such as “next couple of years”–at least not in the same sentence. Also: Introducing Origami and Who will hate the Origami? from Microsoft blogger Robert Scoble. Plus, analysis from Michael Gartenberg of Jupiter Research. Also, Microsoft press info, dated March 9, which, yes, mentions “pricing in the US$599-$999 price-range.” Plus, a PC Mag.com story dated today and using the same price estimate. And finally, an in-depth Microsoft Watch story and links in Tech.memeorandum, through which you can find out about different incarnations of the Origami-class machines from Samsung and so on.
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Comments:
Sorry to be cynical, but Microsoft has a history of announcing vaporware years in advance of actually releasing a product. I take it that nobody really has an Origami type machine in production even at $1000.?
Well the Nokia 770 is here right now at bargain prices compared to that. And frankly for pleasure reading of ebooks and checking email a Palm TX will do just fine for $350.
I think MS realizes that most people will only want to carry around one thing besides their cellphone, and MS is worried that people will be choosing to carry a Sony reader or iLiad and not something the MS has a hand in – hence the announcement so some people will wait and see before buying.
With that said, if they can actually come out with a $500 Origami then everybody wins.
A year or so ago, David and I, in consultation with a few others, worked on a design for an Origami-like device. It was an interesting exercise and the general design of it is, I believe, still superior to the Origami in a couple of innovative ways. Based on our study, it appears possible to sell an Origami device for $500 or less. The problem is in order to get the cost down to that range requires the vendor to order a quite large number of units (I don’t have a defendable estimate, but I would guess it to be a minimum of 200,000 to 400,000 — multiply each by $100 to $150 for manufacturing costs, and it is a big pile of $$$ one must have in their bank account.)
So it is quite a risk for a vendor to decide on the low-cost path because that requires a major upfront capital investment, and must include a massive marketing effort (which costs a lot more $$$) to try to sell the huge number of units they ordered. What if nobody likes the device and it sits on store shelves? The risk is magnified when the general device profile is largely untested in the marketplace — can we say “Edsel”? The risk is further magnified if there are other competing vendors — where the market share is split between them. (This is one downside to the Microsoft tact with the TabletPC and apparently with the Origami — Microsoft may have no choice, however, as noted below.)
So, the usual approach most larger electronics companies take first is a high-price strategy, and build the market from the “top-down.” But it is also risky in that if the product is priced too high, it will forever taint the market against the device and make it more difficult, or simply unappealing, to shift to the low-cost strategy.
Add to this the fact that the major consumer electronics companies (e.g., Toshiba) are simply not into commoditization because of branding and retailing, while the smaller upstarts (including those who actually do the manufacturing), who are more willing to manufacture and price at a commodity level, wait until the market is already well-established before doing their thing. So it is a sort of Catch-22 situation.
One could argue that maybe Microsoft should put its money where its mouth is and provide the up-front funding (with few strings attached) to assist its vendors, who will actually brand and sell the Origami, to take the low-price route with relatively low risk. It could also provide the OS for free for the first few million devices, which will keep prices down while the market is being built.
But I’m skeptical MS will do any of this — it’s not in their genetic makeup. Also, there may be various legal restrictions why they may not be able to do this. For example, giving away Windows may lead to anti-trust scrutiny.
Of course, MS could simply go the XBox route and market an Origami device under its own nameplate. However, game consoles are one thing, while pc computers are another thing entirely. MS will cause problems with the established Windows-based pc vendors and the retail channels by competing with them in their own space, all the while trying to market MS Windows to the vendors, and with anti-trust regulators watching Microsoft’s every move. So Microsoft is somewhat constrained in what it can do with the Origami. It has to rely on cajoling the existing major vendors to do what it’d like to see happen, like it did with the Tablet PC.
What is really needed is an independent, forward-thinking company with deep pockets, with no pre-existing encumberances, and who is not risk-averse, to take the lead in a device like the Origami. David and I will gladly take $100 million and make something happen in this space. <laugh/> Or at least give us a call!
As a final comment, I’m always perplexed why some people believe devices with the capabilities of the Origami can be sold today at retail for $200, and if sold for more, someone is simply gouging the consumer. The reality is that sometimes it is impossible to meet what the consumer is willing to pay based on both manufacturing costs and market dynamics. I believe the ebook device market the last few years illustrates this dynamic as various vendors tried to come up with some magic formula to make it work, but ultimately it was price that has been the killer. Fortunately the components for ebook-capable devices continue to fall in price, so it is just a matter of time before the manufacturing cost impediments are finally razed.
Just my lay assessment. I hope those with first-hand experience in manufacturing computing devices like the Origami will weigh in with their perspective.
jon said:
> As a final comment, I’m always
> perplexed why some people believe
> devices with the capabilities of the Origami
> can be sold today at retail for $200
well, david has been one of the people
who has feed the mistaken notion that
e-book-machines can be had cheaply…
but that’s neither here nor there now.
***
brad said:
> Sorry to be cynical, but Microsoft has
> a history of announcing vaporware
> years in advance of actually
> releasing a product.
yes, you are absolutely correct, but
intel has said some of these machines
will be available _within_weeks_…
from my experience, that means that
the machines have already been made,
they are waiting on documentation and
packaging, and then they’ll be shipped…
so it will be a mere matter of a month
to see if these guys are telling the truth
or feeding us a big bunch of lies…
i’ve learned to be _very_ skeptical, but
this time around, things seem very real.
-bowerbird
Heck, Bird, e-book machines can be cheap. It’s the usual issue of what capabilities they’ll have. The MIT laptop, of course, is Exhibit One. No, it won’t be as fancy as the Microsoft machine, but it will sell for a fraction of the cost. Both will be useful hardware, just at different levels. Mass production, of course, could slash prices, especially if there were an appropriate procurement program to reduce manufacturer’s risk But there isn’t one. And so I’ll stand by statement I made in publishing the valuable Noring essay about a full-powered machine: “I agree with Jon.” – David
david said:
> The MIT laptop, of course, is Exhibit One.
yeah, well, you let me know when you see one.
i guess when you live in a vapor-world,
one piece of vapor is as valid as the next.
as for the “valuable noring essay”,
he didn’t say one thing i haven’t been
saying all along, for many years now…
-bowerbird
The $100 MIT laptop (whose final price may end up a little higher) is not a good comparison with the commercial Origami because 1) the price depends upon making zillions of these machines, 2) there’s no distributor/retailer/marketing overhead to add, 3) some of the parts vendors are willing to waive their usual profit margins, and 4) minimizing component costs as much as possible by providing the absolute minimum performance necessary for its mission.
In fact, the MIT laptop is a good lesson in understading the real economics behind ebook-capable devices. In reading John Dvorak’s blog, one commenter said something to the effect that if the Origami is less than $300 and does everything except maybe toast bread, they’ll buy it. Either this person is clueless (believing this is possible), or they know it is impossible but are saying such a loaded device is not worth it to them at anything more than $300. I see a similar sentiment in the poll David conducted regarding ebook devices — I’m trying to discern whether or not most in the ebook community really believe high-quality ebook readers can be built for a hundred bucks, and the only thing in the way is corporate greed.
Interestingly, from my investigation of the MIT machine, it is more likely to succeed than the Origami. The only impediment to success for the MIT machine is $$$. Find the $100 million from some foundation or benefactor, and it will become a reality since the demand is there (there are a couple countries I’ve heard waiting to buy a million of these at a crack, so long the unit cost is near to $100.) All the benefactor is concerned about is if the MIT laptop device will be built and distributed, and if so, most of the money will be recouped.
But an investor for a commercial Origami-like device is investing only to net a big profit, and to them the commercial risk is quite high as I outlined in my previous comment. Such investors are more interested in investing $10 million rather than $100 million, which means significantly higher per unit costs, leading to focusing on specialized markets rather than mass markets. This means the Origami-like device will be $1000 or more. There already exist such portable devices (and have for a few years), but their price points are much higher than $1000. It’s a Catch-22 thing.
Within Intel heavily involved and all kinds of changes possible at the chip level, I’ll continue to see a $599 price as possible in six months or so. We’ll see if the buzz persists, and sales follow. Check out:
http://www.teleread.com/blog/?p=4445
Already you can buy a regular Tablet PC on occasions for $850-$900.
Thanks,
David
david said:
> I’ll continue to see a $599 price
> as possible in six months or so
any talk about price — any price — is
ridiculous without knowing _exactly_
what you are getting for that price…
not “hypothetically” — and whenever
microsoft takes about a price, it _is_
hypothetical and hypothetical only,
because they don’t make hardware —
but the _actual_ price which you can
plunk down and get a machine in return.
and it will be a month until we have that
much reality in this situation, so it is silly
to go on flapping our mouths on it now.
yes, i know “hype” is your middle name,
david hype rothman, but give it a rest…
if the $599 origami is a fully-crippled
one which is so thoroughly stripped
that it is of no good use to anyone,
then who cares about its availability?
and if the one with great functionality
is $1200, then it’s the basic trade-off
against a big-screen full-on tablet p.c.,
and this new form-factor will be a dud
just like the (overpriced) tablet p.c. is.
but until we know, we won’t know…
by the way, there is a benchmark that
is already out there, which i never hear
_anyone_ talking about — the sidekick.
sidekicks run $150 used to $350 new,
and the plans run from $1-$3 per day.
wireless web access, and it’s a phone.
everyone i know who has one loves it
and will not give it up. that is _key_.
if they made the screen twice as big,
doubling the price to pay for that, and
offered a generous plan at $1 per day,
they could sell a lot of those machines.
and if it ran xp, they’d sell 100-million…
_these_ are the kinds of comparisons
you have to make, ones involving _real_
products in the _real_ world right _now_.
comparisons of one company’s spec sheets
against another company’s spec sheets for
a product that will come out “next year” are
nothing more than stupid, pointless exercises.
-bowerbird
Well, six months now now, we’ll see who’s right. As for hype–well, ask Sony how lovingly I’ve written up the Sony Reader. Same for Microsoft when it comes to DRM. I call ‘em as I see ‘em. OK, Bird, you can fly with the last word, which you’ll inevitably give.
[...] David Rothman takes a look at everything that’s been said so far about price for the UMPC/Origami devices. [...]
I’m a dedicated Mac user but even I hope this succeeds and indeed becomes popular. The main reason is that it will help spur innovation and competition. Who knows Apple may have to revive a New Newton and the Linux device folks (like Nokia) may be able to step into a whole new market.
But the bottom line to me is that small portable devices with good screens that become popular with the public can only help ebooks regardless of OS. Furthermore, a $500 Origami with a long battery life is going to force dedicated ebook reader manufacturers to reduce their prices for a dedicated ebook reader. Who is going to pay $450 for a dedicated reader when they can buy an Origami for $500?
Mirrored from my post at http://www.engadget.com/2006/03/14/oqo-to-go-vertical-to-fight-umpc/
I agree with most of the statements made except for the last part about keyboards.
If we look at the PocketPC / Palm segment, we see consumers warming up to those units with built-in keyboards and abandoning those pure-stylus based devices.
There is a thriving community at hpcfactor.com and many users are learning the usefulness of the HandheldPC, a platform abandoned by Microsoft 4~6 years ago.
I own a HP Jornada 720 right now only because it is affordable (like-new condition from ebay at $139). Even if new units are available from HP today, I would not get them, because HP will charge $900 ~ $1000+ for them. And why? Because HP and folks like Shively thinks that going vertical is the way to go and enterprise folks will lap it up at $1k. HP was wrong and the Jornada was axed.
No one is saying that OQO or UMPCs should be sold for $139. Selling at that price would be suicidal unless there is some content or service subscription sell-in. But if OQO or UMPC OEMs can bring in to retail at $499, then a whole new segment of users from both consumers and corporate would consider it as an option.
And on the keyboard, with the ongoing thing about blogging, a keyboard is god-sent! Why Shively thinks that consumers do not need a keyboard more than the corporate user is beyond me.
I can easily think of at least 3 scenarios where keyboard would be great and if bundled at a consumer-friendly price of $499, it would really sell:
1. The Blogger.
What better than a 1~2lbs* UMPC that the avid blogger can carry everywhere *AND* type *AND* post via wifi online? (This brings up the issue of battery)
2. The budding writer
Writers are creative folks. They are not programmers who could do with a 19″ LCD … actually TWO 19″ LCD, one for the code and one to run the program or to run debug output for ICE. Having the keyboard built-in means being able to write effectively anywhere anytime. It would be crazy for a writer to try and write something with the stylus! *argh*
3. Mom and Pop
I don’t know if anyone (Read: MS, HP and the big boys) noticed, but even mom and pop uses the internet to write emails or look up weather or something. As much as I used to believe that surfing the web is great with a tablet (I owned a tablet [Siemens SL4 SIMpad, instanton WinCE 4.1 device), I found that its not a Read-Only Web experience today. Why, news is not just about reading anymore. Here I am writing this fairly long comment on my notebook, something that would be torturous if not impossible using the onscreen keyboard for SIMpad. Mom and pop or anyone surfing the web today need more keyboard input than before. We post to forum, sell things on ebay, write emails etc. All of which requires the keyboard.
(Enterprise-based scenarios)
4. The Journalist
If bloggers can use a UMPC with keyboard, why not the Journalist? Why, if a UMPC have a built-in camera, he just need to snap some pics and send over to his in-office editor to review and take some detailed ones with a digicam. Then he can type a brief and send it over wirelessly. All without lugging around a notebook … or fumbling over a stylus.
5. Law Agency
I think those folks in blue already have something like that, but bulkier, uglier and in need of an update. They could have the keyboard as part of the car holder which the UMPC docks with. When out of the car, they undock and uses the keydials to do a brief. When docked, they can then sit down and type with the keyboard.
Here, I would like to highlight again the need for whole-day computing batt life. HandheldPCs running wince OS had 8+hr batt life. With an extended batt for some models, they had 12~14hr batt life, more than enough for a day. If UMPCs want to be useful at all, and I am not talking about usefulness to a Microsoftie who spends his time shuttling among the different buildings in Redmond campus, then a minimum of 5hr batt life is required. Why 5hr? Because when someone is using it intensely, with wifi and full screen brightness, mp3 playing, you get prob about 3+ hrs. Nobody would use a UMPC like the way they test their products: mid~dim backlight, soft volume, occasional wifi … only test labs do that please!
With 3~4hrs batt life under MAX power usage, it is more reasonable to call it Ultra-Mobile. Then users do not have to be tettered by the power cord, or lug around the power brick. I read an interview where the MS folk says that power outlets are everywhere, so its not really an issue. That’s what I mean. I think he really did not think of how users will be using their product. He is thinking like an engineer. Power outlets are everywhere, sure. BUT power adapters are *not* everywhere! It means carrying more … meaning less mobile! Imagine having to carry your phone power adapter in your pocket when you go to the movies, the mall, the clubs etc. And asking to plug in once awhile. Oh great! That is really cool! Thank you.
2.5 batt life claim by manufacturers prob mean 1~2 hrs real-life batt time. And that is really lame. Bringing the power brick is a workaround and not a solution. In fact, its not even a workaround, it is what will kill the product altogether.
You add in the power brick, and we are talking almost 3lbs weight. Factor in a bag, and it tips 3lbs or more. That’s what a Ultramobile notebook weighs. And the latter have a DVD drive to boot! A latest Sony Vaio weighs in 2+lb and performs quite well too. Only reason why its not in the mass is because its not priced to be so. But you don’t expect that from Sony, ‘cos Sony sells niche products all the time. They don’t care about mass-market for some of their products.
If Shively or MS wants OQO or the UMPC to succeed, then you need mass. Then you need at least the following:
1. Pricepoint – $499
2. Battery life – 4hr real-life heavy usage
3. Keyboard keyboard keyboard
Thank you.
I would absolutely use one of these devices.
But the quoted price range is what got me interested in BUYING it.
If the majority of these devices are priced at $1100 rather than $800 then I will hold off from buying one. I would pay $800 but NOT $1100.
I think it was dumb of the marketing people to quote a range of $500-$800 and then the real price comes out at $1100. People feel ripped off when you do that.