Column: Ask Steve – Ultra-mobile PCs will follow the Star Trek model

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Ask Yankee Group analyst Steve Hilton. Send your questions to asksteve@yankeegroup.com. Please include your name, city, state and a phone number. Only first names and locations will be published. 

I know one or two Ask Steve readers are Trekkies. Star Trek is a wonderful vehicle to stir executive-level controversy about vertical-specific applications, mobile devices, unified communications and next-generation technology 10 to 30 years in the future. This month in Ask Steve, Yankee Group’s premier device analyst John Jackson and I aim our photon torpedoes at ultra-mobile PCs.

Q: Have you heard of any successful (or unsuccessful) UMPC implementations in field service or field sales for an enterprise customer? Are hardware providers really coming to play in the enterprise market besides Intermec Technologies Corp. and Symbol Technologies (now Motorola Inc.)?

— Matt, Indianapolis

A: Short answer, Matt — no and no. That being said, let’s start with a definition of ultra-mobile personal computers (UMPC). UMPCs are small form-factor, mobile-centric, voice and data devices. In general, imagine a large smartphone (or a small table PC) with a 6- or 7-inch screen with cellular connectivity. Much of the development work has been completed by the smartphone manufacturers (Nokia, Samsung, etc.) in this space rather than the laptop/PC manufacturers (Lenovo, Dell, Toshiba, HP, etc.).

The current market size for UMPCs is a tiny blip on the portable device radar screen. In 2007, Yankee Group estimates there were 14.1 million smartphones and 37 million laptops used by U.S. workers. Smartphone and laptop growth is expected to be 35 percent and 15 percent per year, respectively. There were 175,000 UMPCs in 2007 with very little, if any expected growth.

What’s harming UMPC growth? Put bluntly, UMPC is a technology with no sizeable potential market. Let’s use the Star Trek analogy again. When working on the Enterprise, the crew uses tablet-sized PCs with styluses. The form-factor is correct for proper viewing of data while working away from one’s primary desk location and the computing power of the tablet is high. At one’s primary desk location, a typical flat-screen, touch-sensitive panel connected to a centralized computer is common. When visiting alien planets and needing less applications-intensive computing, the crew generally uses smartphone devices or smaller micro-devices that have industry-specific solutions embedded (e.g., health care applications, natural sciences applications, etc.).

We believe technology will mimic Star Trek. We’ll have more smartphone-sized devices that facilitate remote working albeit with less overall processing power. And we’ll have more powerful tablet-style PCs that facilitate a rich applications environment with extensive processing power.

Imagine a half-hearted space battle between Star Trek opponents, where the winner doesn’t win anything and opponents aren’t sure for what they’re fighting — an apt analogy for the current UMPC industry. Chip vendors, device vendors, OS vendors and applications developers are battling unenthusiastically for supremacy in a very small, no-growth market. Sound like a bad space trip? It does to us also.

In the end, we believe the UMPC space will remain niche with industry-centric solutions. The devices don’t have a mass-market potential because the two end-user requirements — high computing power and mobile/remote empowerment — aren’t met with a middle-of-the-road solution. Winners in the mobile-device world are willing to boldly go where no one has gone before — to a place where the form-factor and functionality strongly fit the end-user requirements in and outside the office (and maybe in deep space one day).

Steve Hilton is the vice president of Yankee Group’s Enterprise Research Group with an expertise in converged solutions for SMBs. Hilton manages a team of analysts delivering consulting, research and programs to help vendors and service providers better serve SMBs, midmarket enterprises and large enterprises globally. Visit Yankee Group online at www.yankeegroup.com.