Or, What I Did on my Summer 'Vacation'
I want to tell you about a dream.
Last summer, after the cutbacks at PalmSource, I spent some of my "vacation" (ie, job search) thinking about products I wanted the tech industry to build. That's what you're supposed to do in Silicon Valley, right? You leave a company, come up with the Next Great Thing, get it funded, and create a wildly successful startup.
I got the idea part. Unfortunately, it involves hardware. Most VCs don't like to fund hardware companies. I mean, really don't like. As in, you talk about the idea, and their eyes get glassy and they become overpolite and they start to inch away as if you had a highly communicable disease.
It is just barely possible to get a hardware company funded, but the odds against success are enormously higher than doing yet another Web 2.0 company – so high that I wasn't willing to take that sort of risk when I need to be saving for my kids' college. Besides, I also wanted to try consulting, and that's working out nicely.
But that leaves me with this product idea that I really believe in, probably more strongly than any new product in the last decade. I know there's a big market for it, and I think the business model is solid. It's an opportunity not just to create a cool device business, but to establish an online service franchise that's at least as big as the franchise Apple has with iTunes. But you have to start with hardware, and that makes it very uncomfortable to the investment community here.
So I decided I'd just share the idea. Somebody steal it. Please. I'm interested in your comments and suggestions , but most of all I want someone to build one of these darned things so I can use it!
Let's start with the customer
A lot of product pitches in Silicon Valley start with the product, but I think it's best to start with the customer. If you understand their needs well enough, the product opportunity becomes almost obvious.
When I was at Palm, we did a lot of market research in the US, France, Germany, and the UK on what people would be willing to pay for (if anything) from a mobile information device like a handheld or smartphone. We found three groups of customer with very different needs. Each is about 11-12% of the population, and each has wildly different needs from the others. I've written about them before, but a quick refresher would he useful:
Entertainment lovers. This group is relatively young, generally college age or young professionals. They're very lifestyle and entertainment-aware, and they want their mobile device to serve that lifestyle. All kinds of entertainment appeal to them: music, video, games, etc. The iPod is their canonical device today, although the Danger Hiptop is also interesting, as is the Sony PSP.
Communication lovers. This group is professionals who are also extroverts, people who live to communicate with others. Think sales reps and marketing professionals. They're hungry to be in constant contact with their friends and business associates, and they'll use any communication technology they can get. A RIM Blackberry or a Treo are the best mobile devices for them today, because they combine phone calls with e-mail.
Information lovers. The third group is professionals who are more introverted, people who deal a lot with information rather than communications. The information could be documents, it could be databases, it could even be artwork. But the emphasis is on the individual's interaction with that information. Think doctors, artists, educators, and researchers. The ideal mobile device for these people is...well, it doesn't exist.
What they want is something that can go with them all the time, and that will function as an extended memory and as a way to capture their ideas. Specifically, they need to capture notes, sketches, and documents; work with databases; and look up information instantly. They need a brain extender, a true information appliance.
I call it an info pad. That's the product I want someone to build.
It's larger than a handheld and smaller than a tablet PC. About the size and thickness of a steno pad. It has a touch-sensitive screen on the front, and very few buttons.
I thought about trying to draw a picture of the info pad, but that would have been risky – both to my credibility and to your sense of aesthetics. Then I remembered a drawing that graphic artist Mike Rohde did of his ideal device, a digital sketchpad. It looks very much like what I'm picturing for the info pad:
Thanks to Mike for letting me reproduce this. I'll say a little more about sketching below.
Ideas for mini-tablet devices like this have been kicking around for years in various forms. But in our research we found that the customers are very sensitive to even small variations in price, weight, size, and functionality. If it's too big or too complex or too expensive, the market doesn't happen at all. This has caused a lot of tablet computers to fail over the years, and most people in Silicon Valley have written off the market as a result.
That's a mistake. Remember, a lot of people wrote off the mobile music market until Apple created the right solution. I think the same thing's going to happen with info pads.
What the product does
First and foremost, ink. You write on the screen and it captures your notes and drawings. It's as much like writing on a pad of paper as possible, because the thing you're replacing is the paper notepad or journal that students and knowledge workers carry with them all the time.
When I say "ink" I mean literally ink – put pixels exactly where the user touches the pen. Tablet PC converts pen strokes to quadratic b-splines, which is mathspeak for curved lines. That process subtly changes the letter forms, smoothing and altering them. It uses a lot of computing power (meaning it needs a faster processor and bigger batteries), and it seems to introduce a slight delay to the interface. You feel like you're using the stylus to push lines around on the screen rather than just writing and forgetting about the computer. I know some people like it, but I found it maddening.
One of the most important features of the info pad is something it doesn't do: handwriting recognition. Most of the note-taking devices that companies have tried to make over the years, from Newton to Tablet PC, make on-screen handwriting recognition a marquee feature. Your handwriting turns into printed text. That's a logical feature to pursue if you're an engineer; character recognition is an elegant way to bridge the gap between human and computer. It frees us from the tyranny of the keyboard.
The only problem is, it doesn't work.
Or maybe a better way to put it would be, it almost works. It's just good enough to get people to try it, creating the expectation that it'll be as foolproof as using a keyboard. But then a few words get garbled, you start going back and trying to correct things, and suddenly you're spending more time managing the device than doing your work.
This is deadly. It's also unnecessary. The purpose of our device is to let you capture your own ideas and information, so you can refer back to it later. In this context, character recognition is useless. You can read your own handwriting. Just capture ink, do a great job of making that effortless, and punt the rest. You may not get written up in Scientific American, but you'll sell a heck of a lot more product.
Okay, so now we're writing on the screen. We've replaced two incredibly useful and inexpensive tools, pen and paper, with something more expensive and less flexible. What's the benefit? A couple of things.
First, our device is an endless notebook. You can keep all your notes in it. Forever. For your entire life. This won't seem like a big deal to a 20 year old, but after you've been in business for a while, there comes a time when you remember a meeting you had a year ago when you heard something brilliant and relevant to the issue at hand. You know you wrote it down, but you also know it's in an old notebook that you filled up and stored in the garage somewhere. Forget about finding it – you might as well have never taken the notes in the first place.
If you have an info pad, that need never happen again. We'll compress and store all your notes, permanently.
What's more, we're going to sync the device to your calendar and address book. So it'll know when and where you took the notes, and if the meeting had an attendee list you'll know who was there as well. You can then use all this information to look up old notes.
This mimics the way people remember things, through associations. You'll remember that the meeting was at a particular conference, or that someone specific was in the room, or that it was the same month as your trip to Mexico. With notes that are cross-referenced with your calendar and contacts, you can browse just the ones that you took at that time, or with that person, or in that location. You may have to look through a few pages, but we should be able to narrow the search enough that it'll be pretty easy to find what you need.
I said earlier that we won't use handwriting recognition in the device, but I exaggerated. There is one useful task for handwriting recognition in an info pad: indexing. In the background, without pointing it out to the user, the info pad will attempt to recognize the user's notes, in order to build an index to them. The recognized text will never be shown to the user, so we don't have to worry about how many words are misspelled. Recognition that's only 80% or 90% effective is useless for writing a memo, but good enough to create a fantastic index.
The killer app in an info pad isn't the note-taking, it's the lookup and indexing functions. This produces one simple benefit for a user: If you write something down in an info pad, you'll never forget it again.
I don't know about you, but in my information-overloaded life, that would be golden.
The personal archive. The other primary task of an info pad is storing and displaying documents and databases. People in information-heavy jobs typically have documents, files, or reports that they may need to refer to during the day. We'll make it easy for the user to identify those documents, whether they're on the user's PC or on the Internet, and then we'll keep them synced so the user always has the latest version.
This archive of documents can be quite rich if the user wants it to be. Storage capacity on mobile devices has been growing explosively. We're kind of blase about that, maybe because storage capacity is even higher on PCs. But even a few gigs of storage can hold an amazing amount of information. For example, one gigabyte could hold the uncompressed text from about 2,800 novels. With compression, you could easily double that, if not a lot more. So we're talking the text of at least 5,000 novels, which is one a week for every week of your life if you live to be 96. That's more text than most people will read in their lives.
What would our information-hungry, memory-extending user do with all that storage? I'm not sure, but one thing I'd do is carry an archive of all my e-mails. Every e-mail I've ever sent. Incoming and outgoing, personal and business. Not the enclosures (they're too large), but the text. It would be great to be able to also capture snapshots of Web articles that I want to refer back to in the future. Make all of this indexed and searchable just like the notes. So this is another part of my life where I'll never forget anything.
Sketching. Mike Rohde's idea was to produce a digital version of a Moleskine, the small notebooks that artists and creative people carry to sketch and take notes. Moleskine owners are obsessive about them, as you can see here. Mike has some very ambitious ideas for the device, including exchangeable nibs for the pen, which would produce different sketching effects on the screen. I think that's an intensely cool idea, but I'm not proposing it in version one of the info pad because of cost and complexity.
I do think we should put basic sketching functionality in the info pad, though. It may not a Moleskine replacement in version one, but it should let users create simple sketches and drawings easily. That's a part of note-taking.
What would your lawyer say? I don't know if I have any lawyers in my reading audience, but if I do their hair is probably standing on end right about now. The idea of a perfect archive of all your notes and documents, with nothing forgotten, is terrifying to a corporate attorney. Companies rely on old information being destroyed, so it can't be subpoenaed in a lawsuit. For this reason, many companies have adopted document destruction policies.
IT managers might also be uncomfortable with an info pad. If an employee can walk away with a device holding every e-mail they sent or received in the company, that's a potential security hole. The reality is that employees can do that with a USB drive today, but I'd expect resistance anyway.
So, to assuage their fears, we'll give corporations the ability to tag company-confidential business documents with expiration dates. After they expire, they're purged from memory. I hate the idea of deliberately destroying a document, but I think we need to be sensitive to these things before they become an issue. Besides, the reality is that many companies will insist on the function and then never bother to use it.
Before I get into the details, let's talk for a second about philosophy on features. I think a lot more mobile products fail because they have too many features than because they have too few. The more features you add, the more cost you add – and the more software you have to write. I'd rather have the engineers focused on making five features work wonderfully than making ten features work okay. So if something's not essential to the core functionality of the device, my inclination is to throw it off the boat.
Size. 9" high, 6" wide, 1" thick (23cm x 15cm x 2.5cm). If you can make it thinner, all the better. The info pad does not fit in your pocket; it goes in your bag or on your desk. Basically, it lives wherever your paper notebook lives today.
Weight. The weight of a thick paperback book – 16 ounces or less (450 grams). This would be far too much for a phone or handheld, but this is a different device. You won't be holding it up to your face.
Screen. High resolution grayscale, very high contrast ratio, touch sensitive. Color is optional – color screens generally have larger pixels and lower contrast ratios, making them harder to read. I think some people are going to disagree about color, but it's not essential to note-taking or document reading. (Think about it – how many of us carry colored pens or pencils so we can take notes in color?)
The ideal screen technology would be the e-ink displays being used in Sony's and Philips' new e-book products. I've seen e-ink technology in person, and it's stunning – the whites are very white, and the blacks are pretty darned black. It looks like a photocopied sheet of paper. It's very hard to see in photographs how much better the screens look; you have to see them in person. To me, as an old-time printing guy, they were breathtaking.
Unfortunately, e-ink screens have a huge drawback – latency. They work by physically driving tiny black particles to the front or back of a white liquid. This takes a lot more time than flipping on and off a liquid crystal pixel.
This is very visible in Sony's e-book reader – when you flip the page, it visibly turns all black, then all white, then draws the new page. It's like the flicker you get from a bad video edit, and just as annoying. This is acceptable in an e-book, where the pages don't change often. But it eliminates the possibility of doing anything interactive, like drawing or writing.
When I was investigating the info pad idea last summer, I talked to someone deeply involved in e-ink technology. The sad message was that it'll be at least two more product generations before they can flip pixels fast enough for effective note-taking – and that will happen only if some potential customer pushes them to do it. Right now the push is for other features -- the biggest demand for e-ink displays right now is for advertising signs that can be changed when needed, and high latency is acceptable there.
So for version one of the info pad, I think our first choice is a very high-resolution, high-contrast grayscale LCD screen. I've seen some beautiful ones in Japan, so I know they exist.
The other constraint on the screen technology will be cost. There's not a lot of demand for grayscale LCDs, so I'm very worried that we may not be able to get the right size at the right price. There are some very nice grayscale screens produced for medical imaging (viewing x-rays and such). But they're generally 19 or 20-inch diagonals, far too large for us. We need about a nine-inch diagonal grayscale LCD, and I couldn't find one in a quick web search. That implies we'd likely have to order a custom-made part, which creates huge inventory risks. We might be safer settling for a color LCD screen.
Battery life. It needs to run all day with heavy usage (assume eight hours of meetings or classes). That's one of the reasons I specified the thickness at one inch. I think the customer would accept a little more thickness to get a device that can run all day long.
Slots. One SD, one PCMCIA. The SD slot is for adding extra memory. This lets our base device be less expensive. The PCMCIA slot is for a cellular wireless card, if the user wants it. It would add a lot of cost to build a cellular radio into the info pad, and more to the point we'd then have to create separate devices for separate network standards, and sell through the carriers. Been there, done that, want none of it.
Built-in wireless. Mandatory: Bluetooth. Not so much to talk to other devices, but for syncing with the user's PC. Cradles are a pain in the butt for a manufacturer. They're inevitably expensive, and the connector is subject to all sorts of breakage and other problems. Instead we ship the device with Bluetooth built in, and a small USB Bluetooth dongle that the user can attach to his or her PC. Then we can buy a nice cheap standardized power supply that plugs into the info pad.
Optional: WiFi. If we can afford it, we should have WiFi built into the device, just so no one complains about it being missing. But keep in mind that this is a note-taking appliance, not a PC. WiFi isn't essential to the core operation of the device.
Camera. Built-in one megapixel camera. The lens is on the back or front edge of the info pad. Why build in a camera? Because it helps with note-taking – you can take pictures of notes on a whiteboard, and you can take pictures of pages in a book or magazine. No more time wasted jotting down things from a whiteboard, or copying quotes out of a book for a research paper.
Operating system. I think there are four candidates – Windows Mobile, Windows CE, Palm OS, and Linux. I would have killed to get a licensee working on a product like this while I was at PalmSource, and Palm OS would be my sentimental choice. But both Microsoft and Access/PalmSource are too focused on phones to take care of our needs. By using a Linux distribution, we can tap into the Linux developer community for supporters and engineers.
Built in applications. Note-taker, document viewer, calendar, contacts, to-do, calculator, search. That's it. It would have been nice to use Palm OS or Windows Mobile, because they have many of these apps ready to go. But they're not formatted for our size of screen, so better to do the apps ourselves. Palm managed to create the original Palm OS apps with pretty small teams, so I think we can handle it.
The other app we're going to build into the device is a third party software store. We'll open up the APIs, and give an on-device store where people can discover new apps and install them directly. We'll take a reasonable cut of the developer's revenue – 20%. They get the other 80%.
Having this software store built in gives us two benefits. First, it encourages a nice third party ecology of developers who can fill in the applications that I have deliberately left out of the device: browser, e-mail program, etc (remember our philosophy – focus our engineering team on making the most essential features work great). The other benefit of the store is that as the developer ecology grows, we get an ongoing revenue stream. We don't have to choose which applications win, but we do have an incentive to make our developers successful. We actually make more money when we leave opportunities for developers to add software. This should create a nice win-win dynamic that is absent on most mobile platforms today.
Price. In addition to the market research I mentioned above, PalmSource did some pretty extensive customer research on specific product concepts, including note-taking and information archive devices. The feedback was very clear – the maximum price for an info pad is about $350, and $299 is much better. By the time you subtract dealer margins, warranty and support costs, and your own profits, the hardware cost has to be in the $100-$150 range. I think that's doable, just barely. But we'll have to be very careful not to add in any unnecessary cost. That's why I want to avoid things like cradles.
The business model
So now we have our product designed, and we know what software we need to write. It looks like a moderately expensive startup – figure about $5-$10 million to fund the actual design and software, and another $3 million to build inventory before our launch. (Normally inventory costs would be a lot higher than that, but we're going to launch our sales direct on the Web rather than through computer stores, which allows us to launch with much less inventory on hand.) But we'll still need to do some advertising, and that eats another $7 million. So we should figure we're going to chew through at least $20 million to put the product on the market.
That's enough to make a venture capitalist think twice, but it's not out of the question at all. The market for an info pad is plenty big. I said above that the information-centric users are about 11% of the US and European populations. That's about 60 million potential buyers. But the market is actually larger – when we tested the note-taker and information archive concepts separately, we found that up to about 20% of the adult population was interested, centered around college students and middle-aged executives. That's over a hundred million people in the US and Europe – a very nice market indeed.
What will scare the VCs is our ability to hold onto this market. I'm sure we'll find some things we can patent, but mini-tablets have been played with for a long time, so I doubt we can patent anything that's so fundamental it'll prevent competition. So if we're successful we'll definitely attract competitors. Those competitors, even if they are inferior, will force down our prices somewhat. They'll also force us to add more features in order to stay competitive. Competing on price and features against large consumer electronics companies is deadly. At best, you hope one of the big players will buy you. At worst, your company dies a slow ugly death. You have the emotional satisfaction of launching a new product category, but none of the profits.
So you need an angle, some feature or approach that will create a lasting franchise rather than a grand gesture.
This is where ebooks come in
In my post last week on the ebook market, I said that ebooks are caught in a nasty chicken and egg situation. You can't get a really good base of ebooks until ebook readers are owned by about 20% of the core book-buying market. But those people won't buy ebook readers until there are a ton of ebooks available to read on them.
I think selling an info pad is the way to break this logjam. People will buy it to take notes and archive documents, but the hardware I've described above is also ideal for reading ebooks – it's light, it's small (but with a screen that's almost as large as a hardcover page), and we've gone for the highest-resolution screen we can find. We've even built in a software store that could also easily be used to sell books.
So we'll make the same offer to publishers and authors that we make to software developers – sell through us, and we'll send you 80% of the revenue. I don't know how the publishers will feel about this (it's a bigger cut than they get from distributors and bookstores, who keep about 50%). But even if the publishers won't go for it, think about what this does for authors. If you're getting an 8% royalty for a paperback, our royalty is ten times better. As soon as we can sell 1/10 what you would sell through traditional publishing, it will pay you more to focus on ebooks.
We'll also create a market for short stories and other literary forms. We'll accept anything you want to publish. I think electronic publishing might blur the lines between a short story and a novel. Today the length of literary forms is fixed by media -- short stories have to fit in magazines, and novels have to fit into about 300-800 glued pages. But once we're distributing electronically, a story can be as long or as short as it wants to be. The author sets the price and get 80% of the revenue.
One benefit I'm looking forward to is that authors might feel less of an urge to stretch a great short story idea into a novel (or even a series of novels).
In the long term, the content store becomes the core of our business. Once we get it to critical mass, it will be very hard for anyone else to copy, because they'd have to replicate our whole ecosystem – the devices, the store, and the base of content. What's more, because we've encouraged the creation of new content products, there are a lot of creative people who will be selling only through us.
We have duplicated the iTunes model, but this one is focused on words rather than music.
At this point, who cares if the consumer electronics companies clone our hardware? We can use our superior solution to compete with them. Or, the approach I like best is to license our software to them. Actually, we'll give them the software, on the condition that we run the store and keep all 20% of the revenue from it.
What would that revenue look like? Well, let's assume we that we captured 10% of book sales. Book sales are about $43 billion a year, so 10% is $4.3 billion. That's our revenue; our profit is $860 million. And if we have licensed the software, we make that profit with miniscule overhead.
Now, to be realistic, book prices will come down when ebooks are available, because we've cut out so much high-cost infrastructure. But our revenue wouldn't be capped at 10% of the book market either. For example, iTunes has about 80% of the downloadable music market in the US. At some point the numbers become arbitrary -- just pick the share figure you think you could get. No matter how you construct the model, there's potentially hundreds of millions of dollars in profit, with very low overhead. Eventually you can toss aside the hardware business like a butterfly shedding a chrysalis.
But to get this you have to be the first one to make the ebook market take off. Which means you have to start by building hardware.
In reply to my previous post on the ebook market, John Mayer commented that the education market is a great starting point for ebooks. I think he's right, and it's an especially great starting market for the info pad. Students are logical targets from two perspectives: they take a lot of notes, and they have to carry a lot of books. If a small and inexpensive device could help them with both problems, I think it would be very well received. And although many students don't have a few hundred dollars to spend on yet another device (especially after they blew all their cash on an iPod), I think we could convince mom and dad that an info pad would be the ideal gift for a college freshman.
I think the publishers might not welcome etextbooks, since they could seriously disrupt the very lucrative market for printed textbooks. I'd expect resistance from college bookstores as well, which could be a major hurdle on campuses where the bookstore is a fundraiser for the student union or other activities. But we might be able to work directly with the professors who today create thick readers of photocopied articles for their classes. It would be much easier for everyone involved if those readers could be delivered electronically. We'd need to create or license some business structure to purchase reprint rights to articles, but that service could become a revenue stream for us.
One major asset for a collegiate info pad is Project Gutenberg, a nonprofit volunteer organization dedicated to converting every non-copyrighted book into electronic format. Pretty much everything written before the 1920s is now out of copyright, so over a period of years the project has amassed a huge library of classics from authors like Mark Twain, Shakespeare, and Charles Dickens, plus enormous numbers of more obscure works. There are about 18,000 titles in all. Unfortunately, there isn't enough demand for classic books to push a reader device to critical mass, but it'll help with college students, who are after all forced to read the darned things (and sometimes actually enjoy them).
Since we have an application programming interface for our device, we could also offer a simple software tool to let professors create quizzes and interactive content for their students. Something like Hypercard or its modern descendants.
There are a lot of companies working on pieces of this marketplace, but no one has put together the whole solution. Here are the most prominent examples.
Microsoft. Tablet PC is the most obvious example of an effort to make a tablet computer for note-taking, and for me it's also the most disappointing. There's an old joke that if you own a hammer, every problem looks like a nail. The Microsoft corollary is that if you own a PC operating system, every device looks like a PC. What customers need is a note-taking appliance, small and sleek and focused. What Microsoft gave them was a PC without a keyboard, awkward and expensive and (in my opinion) bloated. I'm not going to do a full Tablet PC review here, or this post would go on forever. But price and weight alone disqualifies Tablet PC from serious consideration for the sort of role an info pad would play.
I had high hopes that Microsoft's new Origami tablet computer design (now called the Ultra-Mobile PC) might address the problems. But it's looking more and more like a warmed-over OQO, demonstrating that Microsoft has graduated from ripping off its licensees' most successful products to ripping off their marginal ones. With a price of around $800 and four hours battery life, the product's a non-starter as an info pad.
Now Microsoft is touting a future tablet that would be very small and light, but it's a couple of years away and would cost $800. Everything that Microsoft does in tablets seems to converge up close to $1,000, whereas what the market needs is something that converges down below $299. I would love to see Microsoft do a true info pad product. But it would have to be radically simplified and run Windows CE rather than full Windows, and I fear Microsoft isn't capable of working that low in the market.
Please, Redmond, prove me wrong.
Sony Reader. This tablet device is about the right size and weight, and it has an e-ink screen. The key to its success is getting lots and lots of books available for it at paperback prices. The sample screen shot for Sony's bookstore shows close to hardcover pricing for books, which gives me the willies.
I also worry when I see the Sony website brag that it'll have "thousands of titles." We had thousands of titles at SoftBook too, and that turned out to be a couple of hundred thousand too few. There's no note-taking -- the screen is not touch-sensitive, and besides the screen response will be too slow to enable that. Sony might be able to get enough books for the device if it bought a major publisher. That's not out of the question – Sony bought a movie studio to make sure it had content for its media devices. But I think Sony's new management isn't as adventurous as the old team.
I want the Sony Reader to succeed, but unless something creative happens on the book supply side I suspect that in a couple of years we'll be reading about the quiet discontinuation of the product line.
Iliad. The Iliad, from a Philips spinoff called Irex, looks very similar to the Sony Reader. Irex appears to be positioning it for use in vertical professional markets. That's a little disturbing – business verticals are the place where failed consumer tech products go to die. When I was at SoftBook, we started focusing on business verticals after the consumer business failed to take off. There are definitely some verticals for a small tablet, but in that space you'll be competing with Tablet PC. Tablet PC will be more expensive, but it's easier for a company to develop vertical apps for it (because it's Windows), and generally companies are less price-sensitive than consumers. Best of luck, Irex.
Anoto. This is an interesting attempt at note-taking. A special pen incorporates an optical sensor that can detect a faint pattern of dots on specially-printed paper. The pen captures your handwriting and transfers it to a PC, so you can look at your notes later. The drawbacks are that you have to buy special paper, and the notes are stored on your PC, so you can't refer to them in a meeting. Also, all the electronics crammed into the pen make it very fat. You feel like you're writing with the business end of a cow thermometer.
The Anoto technology is included in LeapFrog's Fly pen and Logitech's IO Pen. I couldn't find sales data for either one. Interesting side note: the last time I was at Logitech's headquarters, they had you sign in using an IO Pen. But wasn't connected to a computer system, and you signed in on a plain paper form. They were using it just as a pen.
Note-taking software. There are several companies creating note-taking software for tablet devices. Two prominent examples are EverNote and GoBinder. EverNote is a generalized note-taking and archive product, while GoBinder is optimized for students. My take on them is that they're both interesting products that have been hamstrung by the lack of appropriate hardware.
Who could build an info pad?
Microsoft's an obvious candidate, but I think they're too focused on miniaturizing a PC. Palm could do it, but they need to spend most of their energy on smartphones. There's an outside chance that Jeff Hawkins' secret project at Palm is an info pad-like device, but people who were with Palm in the early days tell me that they were so badly burned by note-taking on the Casio Zoomer (for which Palm provided software) that they'll never do it again.
Amazon could do it, as could Google. Amazon's running a secret hardware development project in Silicon Valley. For a while I thought it might be an ebook reader, but the Wall Street Journal reported recently that it's a music player. Google is working on all sorts of mobile technology, including a project called Android. No one outside Google seems to know what Android is, but there have been rumors that it's a mobile device OS. All I know is that project Android has hired some Palm OS engineers, but that doesn't mean they're necessarily working on the same sort of things they did at PalmSource. Yahoo could do it as well, but given their ties to Hollywood I'd expect them to be more focused on a video and music player.
I think LeapFrog would be an interesting candidate. They make learning tools for children, and also the Fly pen for middle school/junior high kids. I could see them branching into an info pad for college students. Unfortunately, LeapFrog is having some financial troubles, and I don't know if they can afford to launch a new product line. They say they intend to spend more on R&D, though, so maybe there's hope.
Apple is the other obvious guess. They have the money, the motivation, and the skills. But Steve Jobs supposedly has a phobia against anything that even vaguely resembles a Newton, and I wonder if that might keep them away from the market. I have a feeling he could overcome his fear if he wanted to.
It would be amusing if Apple ended up controlling both emusic distribution and ebook distribution, wouldn't it?
There you have it: I think the best way to build the ebook market is to sell a note-taking and document archive device that also just happens to read ebooks. I did enough research that I'm confident you could build the product, and the business, today. No magical breakthroughs needed, just careful execution.
If anyone out there has $20 million to spare, let's chat. I'll give you some more details on how to build an e-publishing empire. You just have to promise to make me a beta tester.
By the way, I wanted to say thanks to the folks at WAP Review for including my post on ebooks in this week's Carnival of the Mobilists.