Longer article, but good read, about OQO and it's new competitor, Dualcor, which brings out a device with twice the battery life (12 hours) and 2 CPUs: Xscale (ARM) and VIA C7 (X86) inside.
Still, the price point of $1500 is too high for that to take off imo.
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=DJ SOMETHING VENTURED: Measuring The Need For A Pocket PC
03/08/2006
Dow Jones News Services
(Copyright © 2006 Dow Jones & Company, Inc.)
By Donna Fuscaldo
Of DOW JONES NEWSWIRES
Two years ago, San Francisco start-up OQO was winning high praises for its technology.
Winner of "Best of CES" by TechTV at the Consumer Electronics Show in January 2004, its portable computer was destined to be a smash hit among corporations looking for a hand-held device that had all the functions of a desktop computer. By May of that year, OQO already had raised close to $20 million in venture funding.
But OQO hasn't gained the mass appeal expected of it, instead catering largely to a niche market of technology enthusiasts and a handful of corporations. The company declined to say how many units it has shipped or what it has in sales.
Nevertheless, venture capitalists continue to pour money into the company, saying OQO and the hand-held computer market are on the cusp of something that could be potentially big.
"The technology is starting to reach the point it actually can produce a different class of device," says William Reinisch, vice president of strategy and new initiatives at Motorola Inc. (MOT). "That is very intriguing."
Motorola Ventures, the VC arm of Motorola, was one of the venture capital firms to participate in OQO's latest $19.4 million round of financing, which includes commitments for an additional $6 million. That financing took place in November.
The hand-held computer market has been slow to take off. Small devices such as personal digital assistants, digital music players, Blackberrys and cellphones are all the rage, but fully functional computers that fit in your pocket aren't. Industry watchers blame that squarely on one thing: price.
"How much they cost has been an issue all along," says Roger Kay, founder and president of Endpoint Technologies Associates, an information technology consulting firm. "These things are not cheap."
Indeed, OQO's 01+ portable computer, which has been available since October 2004, starts at about $1,899. A competitor, DualCor, out of Scotts Valley, Calif., will sell a hand-held computer dubbed DualCor cPC for about $1,500 later this month. For now, both products are geared toward the corporate market, which has more discretionary money to spend on new gadgets.
Mike Kwatinetz, general partner at Azure Capital Partners, an initial investor in OQO, says the value of the device outweighs the extra cost. "Up until recently, you didn't have any product that could fit in your pocket or hook on your belt," Kwatinetz says.
Kwatinetz, a former computer hardware analyst on Wall Street, who sits on the board of OQO, thinks hand-held computers would be attractive to doctors or nurses who want easy access to patient records or any other road warrior who needs to work on a computer remotely.
Indeed, workers on the go and the PC replacement market are areas of focus for the hand-held computer makers. OQO's new chief executive, Jay Shiveley, who was brought in last week to execute on OQO's sales and marketing strategy, also sees opportunities to design special applications for the government. He notes that Paladin Capital Group, which participated in the November round of funding for OQO, has "deep" experience in the government and green technology markets.
Shiveley says OQO hasn't had a lot of trouble raising funding. In fact, even last week, Shiveley said he had two discussions with potential investors about investing in OQO, even though the latest round of funding was oversubscribed.
Runs On XP
What sets hand-held computers apart from PDAs or a Blackberry is the operating system. The OQO runs on Microsoft's Windows XP, while DualCor's will run on both Windows XP Tablet PC Edition and Microsoft Windows Mobile 5.0. Both are mini replicas of what you would see on your much larger desktop or notebook computer. Advances in battery life and chip technology have enabled the products to have 5-inch color screens and last for up to six hours in OQO's case and up to 12 hours in DualCor's before having to recharge the battery.
While the hand-held computer market is still in its infancy, how long it will stay there is up for debate. Rumors have abounded that Microsoft Corp. (MSFT), in conjunction with Intel Corp. (INTC), is about to release small ultra-portable personal computers. Meanwhile, Hewlett-Packard Co. (HPQ) recently separated its hand-held device unit from its notebook division to better focus on the market.
Start-up DualCor, which took a different tract and raised money from angle investors, or individual investors, thinks its product will compete well with OQO. The DualCor cPC is not only a fully functioning computer, but it also has a built-in phone. The computer, cleverly called a "handtop" by the company, has a 40-gigabyte hard drive and has eight to 12 hours of battery life. Steven Hanley, chief executive of DualCor, says the company has seen good interest from potential customers for the computer, which is selling for $1,500 this month.
"There's been zero resistance to the product from corporate customers," says Hanley, who declined to name potential buyers of the computer.
For Motorola's Warren Holtsberg, equity investment manager at Motorola Ventures, investing in OQO is all about recognizing an opportunity for his parent company. Motorola Ventures typically invests in companies that are of a immediate strategic benefit to Motorola, Holtsberg says. Motorola Ventures is usually a middle-stage investor.
Motorola Ventures decided to invest in OQO now because the technology had advanced to a point where there was an actual product the Motorola VC arm could evaluate. What's more, a portable computer jibes with Motorola's vision of being able to access information anywhere, any way and any time.
"In the technology world, we like to have a little more to go on aside a PowerPoint slide and a vision," Holtsberg says.
-By Donna Fuscaldo; Dow Jones Newswires; 704-371-4263; donna.fuscaldo@dowjones.com
(END) Dow Jones Newswires
03-08-06 1100ET
Copyright (c) 2006 Dow Jones & Company, Inc.
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