Overnight, it seems, mobile Internet devices, or MIDs, are the topic du jour.
But like many overnight sensations, the MID category is constructed of a fragile combination of long-term toil in the lab and a giddy if ephemeral sense of demand that has a long pedigree in consumer technology.
Despite all the chatter and even prototypes waved about as WiMAX and “open access” smoke has wafted throughout the industry, the category remains mysterious if somewhat attractive to consumers, according to a plethora of recent surveys.
The $64,000 question, as always, is whether MIDs are a technology in search of a market or the answer to “pent-up demand” forecast by certain carriers, vendors and analysts.
The best-known and, possibly, only mobile Internet device, or MID, on the United States market today is Nokia Corp.’s N810 Internet Tablet – if your definition excludes smartphones or browser-centric (plus cellular voice) devices such as the iPhone.
The N810’s principal connectivity is Wi-Fi (802.11b/g), though it can make a Bluetooth connection to a handset with a data plan. It provides a slew of communications options including VoIP, instant messaging, e-mail, video conferencing and a relatively large-screen browsing experience. (It sells new on Amazon.com, for instance, for just under $400.)
And, indeed, “communications” is ranked highly by consumers asked to identify what applications would be appropriate to a MID beyond big-screen browsing, according to some studies.
But bullish vendors have said that MIDs will not only provide personal, ‘pocketable’ Web-browsing capabilities, but that the category will embrace all types of consumer electronics devices – cameras, gaming consoles, multimedia players – and provide the means for social networking. At least, that’s the dream.
Measuring consumer interest
Three new surveys were released in recent months that purport to track consumer interest in this nascent device category.
And at least one component vendor, Texas Instruments Inc., has a freshly minted division devoted to pursuing it, according to Seshu Madhavapeddy, who leads the new unit. Madhavapeddy said the category’s success will depend on the experience, ‘pocketability’ and power management that delivers all-day usage without recharging the device.
Intel Corp. CEO Paul Otellini also evangelized last week to journalists about the potential for Internet tablets. Both TI and Intel emphasize the “full” (Intel) or “no-compromise” Internet experience.
Thus far, Nokia’s N810 has not been a runaway hit with consumers, though Nokia has proceeded with a WiMAX edition that awaits commercial launch of that network. And TI said last week that MIDs from its customers will hit the market later this year in myriad forms with an array of consumer electronics functionality. We may not have to wait long for early adopters to render judgment on the offerings.
The three consumer surveys, in general, appeared to find limited interest in such devices, though early adopters appear interested.
Still, the findings of recent studies are all over the map – perhaps understandably, as they sought to evaluate basic attitudes rather than specific products.
–A Yankee Group/RCR Wireless News survey found that 84% of respondents see ultra-mobile PCs and Internet tablets as having the best prospects for high-volume sales in the next three years – a rating exceeded only by portable music players. The same group said that content, media and entertainment would have the most disruptive impact in that period (44%), but that the Internet was close behind (32%). A large majority (94%) said that mainstream electronics retailers would be well-suited to non-traditional device sales.
“This category (UMPCs and MIDs) has failed to find a mass market thus far, but is a loosely defined flagship for WiMAX and portable broadband use cases,” said Yankee’s John Jackson. “It’s interesting to see the enthusiasm for UMPCs and Internet Tablets.”
–In contrast, an In-Stat survey found that nearly half its survey respondents chose smartphones as the device of choice, while only 7% would choose MIDs. UMPCs were somewhere in the middle.
In-Stat analyst Bill Hughes credited familiarity in this case.
“That smartphones are established as a valuable solution today makes the sales process easier than for the other mobile device options,” Hughes said. “Those showing interest in MIDs were unclear about how they would use these devices or where to buy them.”
–Forrester Research found that among online consumers, 9% comprise the first wave of likely buyers of MIDs.
“Because it’s difficult to ask about future products, we tried to get at hurdles to adoption, the ‘pain points’ associated with today’s users of the ‘Web-on-the-go,'” said Charles Golvin, analyst at Forrester. “Nine percent is a reasonable base for a new category of device.”
–Compete Inc., in various online consumer shopping studies found high interest in “connectivity” in general, but wireless shoppers in particular (vs. consumer electronics shoppers) are confused by the plethora of service, device and platform offerings.
“The notion of ‘open access’ is a media-driven issue, not a consumer issue,” said Ryan Burke, director of sales and business development for telecommunications and media at Compete. “While we have no specific data on MIDs, that category is definitely an opportunity to deliver a simple message, like ‘Internet connectivity.’ That could resonate. Also, we’ve found that smartphone users are just as interested in personal productivity as well as business productivity. That could bode well for MIDs.”
So, is the glass half-empty or half-full?
“Though 7% interest is nothing to sneeze at, my concern for the prospects for MIDs in the U.S. is not just this low number,” said Hughes at In-Stat.
Hughes cited device redundancy (smartphones and feature phones can browse the Web), end-user uncertainty over the MID use case and the potential for muddled MID marketing as inhibiting factors.
“These are the reasons I see the glass as half-empty,” Hughes said.
But Hughes said the glass is half-full if one considers other factors. Because Nokia and Apple support the MID category, many people will look because they trust these brands. Also, WiMAX carriers prefer MIDs to smartphones and will help promote them. Plus, Asian markets are likely to support MIDs, making their U.S. reception somewhat moot on a global market scale.
“The take-away for vendors is that early adopters will buy MIDs when the use case is made clear,” said Forrester’s Golvin.
