Samsung Means Business With Its Q1 UMPC

— July 26, 2006

Samsung Electronics has big plans for its tiny Q1 ultramobile PC.

Despite a less than warm initial reception for the diminutive PC category by analysts-- ultramobile PCs are small, keyboard-less handheld computers capable of running Microsoft's Windows XP--Samsung said its Q1 UMPC has exceeded its expectations, particularly for businesses.

And now it's raising the bar.

Samsung, which had not sold a Samsung-brand PC in the United States for several years before the May 2006 launch of the Q1, expects to announce soon at least one deal to sell quantities of the $1,100 UMPC to a corporation.

Meanwhile, depending on the success of the device, its future plans include at least one Q1 follow-on and possibly offering Samsung-brand notebooks again in the United States.

"What we've seen is that once people are actually holding a UMPC, they start to see the possibilities. Seeing pictures or reading about it doesn't do it justice," said David Nichols, director of product marketing for Samsung Electronics' Information Technology Division, based in Irvine, Calif.

"Let's face it. This product in terms of specs doesn't line up well with some of the more traditional notebooks out here," he added.

UMPCs were originally intended by Microsoft and Intel for consumers to keep up on email, watch videos or listen to music. But the device's price, typically $1,000 or more, and usability have generally been lacking, said Richard Shim, an analyst at IDC in San Mateo, Calif.

"Based on usability and price point…the prospects aren't promising," for the UMPC right now, Shim said.

"Samsung needs to lower the price. They need to increase the convenience of using the device--it's not a very intuitive device right now--[and] realistically, they have to wait for the market to catch on to the idea."

However, Samsung also saw business applications for its Q1. Despite the criticisms leveled against the UMPC, such as its price, some IT managers have embraced the device, Nichols said.

He mentioned that there is a lot of traction in the education area, in the healthcare environment and also in the mobile sales area.

"We're exceeding the initial expectations that the group had for the product…now we have raised the bar. We're excited about the prospects we see going forward."

Samsung, which sent about three dozen Q1s to IT managers around the United States for testing, now feels that it is close to being able to announce at least one relatively large deal, Nichols said.

The Q1's small size--it's far smaller than a lightweight tablet PC, which might come with a 10-inch or 12-inch display and weigh between three and five pounds--means it's easier to carry for highly mobile workers such as field sales agents or medical personnel, Nichols said.

Indeed, corporate applications for the Q1 or other UMPCs might include sales force automation, accessing electronic patient records or even providing students with computers.

For its part, Microsoft has also been working with ISVs (independent software vendors) and other third parties to try to foster greater acceptance for the UMPC. The software giant is also expecting to see several other brand name manufacturers join the market later this year.

New manufacturers will bring forth additional usage models and design improvements such as integrated, drop-down keyboards and built-in wireless wide area networking, while also driving down prices.

"You'll see an additional wave of UMPCs available in the holiday timeframe," said Mika Kramer, head of Microsoft's new Windows Client Mobility Marketing Team, in a recent interview with eWEEK.

"We are seeing a lot more Tier 1 players get a lot more interested in releasing the UMPC."

But Samsung, too, has its eye on the future.

Nichols implied that Samsung is looking at offering more than one type of UMPC going forward--it might deliver a corporate model and a consumer model--as well as investigating beefed up wireless capabilities.

"Product-wise, we're meeting with as many end users as we can to get their feedback on the device," he said. "We're gathering all of that feedback and working with our team back in Korea to see what makes the most sense in terms of product direction."

As part of its efforts, Samsung is looking at several factors, ranging from processor performance to battery life and docking capabilities.

Generally, people want improvements in battery life. Although a keyboard doesn't appear to be high on the list given that corporate applications don't generally require a keyboard, he said. Moving away from the Q1's 7-inch display does not appear to be in the offing either.

"I've never met an electronics company that says we don't need to make it thinner and lighter," Nichols said.

Nor has Samsung ruled out a broader presence in the United States market in the future. The company has sold notebooks in the United States in the past, most recently in the mid-to-late 1990s.

But, for the time being, Samsung intends to maintain a focus on the Q1 and thus isn't likely to offer full-sized notebooks, Nichols said.


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