day 48

microsoft smells $$s 5: learning, again

Yesterday, we described some of the advanced technology found in lagging PDAs. Today we explain why this is too much for the consumer to bear. Clearly, the more technology a company pumps into a new product, the more difficult it becomes for product managers to get a bang for their buck. This is due to two forcing functions: 1) technology is expensive and, 2) the more things you change, the more customers you have to educate. Machines based on radically new ideas, such as the General Magic, Apple, and Motorola PDAs, have a long marketing road ahead simply because they go beyond the current limits of innovation. Bear with me while I apply mainstreaming to prove my point. Any product or service that tries to meet the objectives of mainstreaming must overcome resistance on the part of the consumer by reducing prices, training, maintenance or social ridicule. Companies do this by learning how to produce a product at a low price, requiring low maintenance, with high appeal to an increasingly tribal society. PDAs are no exception to this rule. The engineers who designed the Newton and Magic Cap machines raised, rather than lowered, barriers to mainstreaming by incorporating too many technologies all at once. As a consequence, the consumer perceives that there is little bang for lots of bucks. But, wait! High sales of Psions and HP200LX machines have not gone unnoticed by the world's smartest money-making machine -- Microsoft. Noticing that HP and Psion are cashing in on miniature DOS machines, Microsoft has rejuvenated its PDA operating system project. Called Pegasus, the new OS will be a crippled Windows95. Stripping out lots of stuff like OLE and color, Pegasus will be exactly what consumers want -- a DOS-like OS that runs most of Microsoft's applications on machines with tiny keyboards and low power consumption. Hungry to get into the business, companies like Hitachi and MIPS have plans to use Pegasus on low-cost Windows95 clones that you can put in your pocket.

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