Brian's Brain

As I wrote up my Nokia Internet Tablet analysis last weekend, my thoughts inevitably wandered to another 'middle thing' product (as PC Magazine's Sascha Segan called them in an August 7, 2007 print issue editorial), addressing a technology category that some believe abides (with sufficient demand potential to justify its existence) in-between smart phones and full-blown PCs. That product is Palm's Foleo mobile companion, introduced by the company at the end of May of last year at the D Conference and promptly canceled just over three months later, before it ever went into production.

At a high level, at least at first glance, Nokia's N810 Internet Tablet and the Foleo have a lot in common. They both run Linux on ARM-based CPUs. They both include a limited suite of applications; email, web browsing, document viewing and narrow-scope document creation, for example. They both embed Wi-Fi transceivers. And Bluetooth capabilities enable them to also go online via mobile phone-as-modem intermediaries.

Foleo, at $500 (after $100 introductory rebate), was roughly $100 more expensive than the N810. For that price increment you got a much larger LCD (10" widescreen diagonal) mated to a full-sized keyboard, in a subnotebook-reminiscent form factor. But whereas Nokia's three generations of Internet Tablets have been moderately successful, Foleo was widely panned by press and potential customers alike at its unveiling, leading to its embarrassing retraction one quarter later in spite of its Jeff Hawkins lineage. What gives?

Let's hit the easy issues first. This is a product designed for business people who might prefer to take a sub-2.5 lb form factor system on the road instead of its full-featured subnotebook alternative. But by the time Foleo hit the limelight, Palm PDAs and smart phones had lost substantial presence and momentum in the corporate environment.

Palm could have licensed or otherwise developed (directly or via third-party partners) robust connectivity and synchronization capability between Foleo and RIM's BlackBerry products, but high-level 'push Palm' objectives precluded such blasphemy. Instead, all that Palm offered (aside from connectivity to its own handhelds, of course) was a half-hearted embrace of Microsoft's Windows Mobile platform, indicating that it 'should' work but not promising formal compliance testing. No guaranteed Exchange server support? No Symbian-based phone support? And again...no RIM support?

From a pricing standpoint, at least at the time it came out, Foleo actually looked pretty good. While it was possible to purchase Windows-based laptops for ~$500, they were large and hefty. Thin-and-light subnotebooks, exemplified by Apple's recently introduced MacBook Air, are generally 3-5x pricier than this. Dell's XPS M1330, at ~$1,000, is probably the most price-competitive notebook PC in this particular category.

But corporate PC users aren't particularly price-sensitive, at least compared to consumers (who, again, were not Foleo's target audience). In fact, svelte and expensive computers are often described as being executives' 'jewelry', perfect for ego-puffing purposes. And nowadays, for those who are price conscious, ASUS' Eee PC line (pronunciation guide) delivers even more overall capability than Foleo (with the notable exception of Bluetooth, but that's just a mod away) and at notably lower cost than Foleo.

Now we turn to the main motivation for this particular writeup. In comparing the Nokia N810 and Foleo, I'd argue that the latter's similarity to a laptop was fundamental to its downfall. This same issue limited the success of the Windows CE-based Handheld PC, for example, and it will likely also put the brakes on HTC's Shift success. If it looks like a laptop, is my contention, people expect it to be a laptop. If it's not, but it's not appropriately priced significantly below the laptop counterpart, it won't sell.

Foleo was substantially less expensive than thin-and-light notebook PCs, but as I already mentioned, this fact wasn't important enough to a large enough segment of the target audience. And for those for whom cost mattered, there were always low-end 7 lb. laptops, whose price tags Foleo would inevitably always be benchmarked against. The Eee PC, conversely, comes in substantially below even a low-end laptop's cost threshold. While the Eee PC's got plenty of problems of its own, price isn't one of them.

Don't get me wrong; as the first few paragraphs of my recently published cover story (which I hope many of you have already perused) hopefully make abundantly clear, I'm not a big advocate of all-in-one devices (ironically, with the exception of the PC). Keep in mind that I'm 5'5" and 130 lbs; I'm a huge fan of svelte toteable tech gear. And as time goes on, I'm increasingly warming to the idea of 'middle thing' products; as their hardware and corresponding software expand in capability, as wireless connectivity becomes increasingly ubiquitous, and perhaps most importantly as technologies such as Google's Gears enable users to continue doing meaningful work on 'middle thing' products when they're not 'Net-connected (i.e. when you're on an airplane, for example). But Foleo forced too many tradeoffs on its potential customers, especially considering its disproportional price tag, to be taken seriously.

Architecture and product research and definition, along with subsequent product positioning (including all-important pricing), are often poo-poo'd by 'technical types' as being frivolous marketing exercises. As I hope this case study has pointed out, they're anything but that. An improperly defined product, no matter how well it's designed, is inevitably doomed to failure in the marketplace.

Help out your marketing peers. Your common success depends on it.