Lessons from CES: How Palm Beat Apple and Other Stories

Tuesday Jan 13th 2009 by Rob Enderle
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AMD, Intel, Dell, HP – all the companies and trends at this year’s Computer Electronic Show. Plus: Linux in stealth mode.

The big story at CES was how Palm, reading from Apple's own playbook, took over CES much like Apple did from MacWorld two years ago when they announced the iPhone. But there were other vendors who were pushing the envelope and it was interesting how much Linux was floating around under stealth mode and making headway.

This week I'm going to pick out some companies that are breaking out of their molds and doing things that could not only allow them to survive in these hard times but flourish.

Palm out Apples Apple

The Palm Pre…where do I start? It was like going to a revival meeting.

At the launch announcement there were screams, moans, I'm convinced the guy next to me was about to start his own personal halleluiah songfest if he didn't have a coronary first. It was quite latterly like a good Steve Jobs product announcement.

What makes Apple truly different is that the products are designed to present well, and with the Palm Pre it was as if they went down a list of what folks liked about the iPhone and made those things better, and what they didn't like, and fixed them. They even, during the presentation, took shots at Apple, suggesting subtly that the company couldn't execute. It was corporate trash talk and the audience went wild.

They took a lot of chances doing this, but the result was that they owned the show. So many firms are so afraid they will make a mistake or over promise they fail to build any excitement for their products and then seem surprised that the "if we build it, they will come" model doesn't work outside of movies.

Palm got a standing ovation and if they can get this product out by June – and I did get to use what appeared to be a very solid and market-ready device – they won't be able to make enough of them to keep up with demand.

Phoenix Technology Kicks it Into Hyperspace

Both the Palm product and Phoenix's Hyperspace are based on Linux and represent the best personal implementations of this platform I have seen. Phoenix is known for BIOS but had been languishing in a market that seemed anything but exciting. So they decided to step out and use virtualization to create something that, rather than competing with Windows, worked in conjunction with it, making both better.

Linux has advantages in that, like Macs, it’s UNIX at its core and few viruses can run successfully on it. On the other hand it is application poor and comparatively hard to use. Hyperspace takes the Linux advantage and uses it to create a secure, extremely fast booting and browsing environment. But you still can fast switch into Windows to do your work.

The product is simple and elegant and rather than spitting in the face of Microsoft it cooperates with it (much like Microsoft is doing with Novell). In the current Obama environment cooperation seems to be the method of the day and this product speaks to this like no Linux offering on the desktop every has before.

I think it is brilliant, and they had folks all over the show passing out disks and effectively pulling crowds into the booth. Nicely executed!

AMD Dragon/Yukon

AMD is a desktop processor company that typically lives under Intel's shadow. There were two laptops that stood out at the show and one, for once, was based on AMD technology.

This was the HP DV2 which was nearly as thin as the MacBook Air, could play Blu-Ray movies, and had a starting price close to $600, with better performance than the current MacBook air (largely due to the graphics in the box).

Jet black with chrome accents, this 12" notebook isn’t a Netbook and yet still is very affordable. But the out of the box thing was that AMD, which has never been known for notebooks, had probably the best product for the current economy and it was under the market leader's brand.

There wasn't any room in the show that didn't have an AMD Dragon image of some type. AMD is consistently out marketed by Intel and this time, for what was likely a fraction of Intel's budget, they got vastly more visibility for their better named offering.

Part of packaging for consumers is coming up with something they can look for and lust after and Dragons have always been hot. They were able to get this into one of the most popular gaming platforms, the Dell XPS, and at an affordable sub-$1,000 price point, which is unheard of for the brand and perfect for an economy that is in the tank.

In both cases this was out-of-the box thinking and it paid off.

Dell Does Design

Dell historically is known as a follower and the company that built low cost product they sell directly. In 2008 they started changing that image with custom designs, colors and an ever richer XPS line.

At the 2009 CES Dell brought out Adamo, a product that was more beautiful but about the same size as the MacBook Air. Made out of brushed metal and glass (yes, glass) this thing was not only a piece of art but would resist scratching better, by far, than the Air does.

Plus, when you held it (and I held it longingly for awhile) it didn't feel cheap. So many of the light notebooks just don't feel substantial and give the impression they would break if you looked at them funny. This Dell not only looked rich, it felt rich and was undoubtedly the most lust-worthy of the products at the show.

In addition, Dell, which lags HP dramatically on printing, brought out the cigarette-sized nicely designed Wasabi printer that addresses a need for portable picture printing that Polaroid used to address but is largely unmet in the current market.

They beat HP to market with this well designed product and, for once, in printing, HP will be chasing them. This was a risk but it was also thinking out-of-the-box. Nicely done.

HP Build Green Gaming

I mentioned the DV2 above but the other interesting product in the gaming space was the HP Firebird. This product is the first "Green" gaming machine.

It design elements of its larger sibling the Blackbird, and this more affordable product has on-board NVIDIA SLI graphics in a hybrid configuration. So it not only pulls less power in full gaming mode, it can be switched to economy mode and be used like a regular PC – or left running while pulling dramatically less energy.

I've been using one of these, and instead of the more typical 300 to 500+ watts, this thing typically pulls 150 watts in high power mode, saving tons of energy and lowering its carbon footprint dramatically. Folks don't think about economy gaming – hats off to HP for doing that this time.

NVIDIA ION for Atom

The hot processor at the show was the Intel Atom. It was on the majority of Netbooks and when I asked why one vendor wasn't using a VIA chip they said because no one wants to buy a VIA -based product. That's the power of marketing.

But the issue with Atom is a lack of graphics performance. The Ion platform by NVIDIA is targeted at addressing this shortcoming but Intel bundles their own graphics technology. And the vendor is tying it up in a nice bundle with financial incentives that make it hard to break out any of the parts to create a best-of-breed product.

However, the Ion from NVIDIA is enough better that some vendors are willing to pay the premium because customers want this extra performance. It turns netbooks into notebooks and provides the incredibly efficient processing power of the Atom with a stronger graphics engine, allowing them to do more fun things with their little computers.

Taking this chance was huge, but the result, when these products show up, will be worth it.

Fugoo: Going Modular

I've been trying to get folks to build a modular computer for years and the economics just weren't working. About the time I'd given up, the people who founded eMachines came out with Fugoo, which is just a cool idea that I'm still trying to wrap my mind around.

We know that things that don't have computers in them are getting them but are going down a path that isn't as efficient and modular as the PC originally did. Each computer is proprietary and comes with unique support costs and problems.

Fugoo is a standard computer module, which could eliminate much of this cost and make intelligent appliances and devices a more affordable reality in a fraction of the time it will otherwise take. I'm into affordable and fast, so, of course I'm into Fugoo.

Cisco Creating the Home Visual Network of the Future

Last, but far from least, was my biggest annoyance at CES: the inability for companies to create an affordable, seamless way to move media around the house.

The best has traditionally come from a small company with a great product called Sonos but they simply didn't have the funding to create something that could move all my media. They simply focused on music and I'm more of a video kind of guy (though my wife loves the Sonos system we have).

Cisco showcased a Home Media product line that appeared to match Sonos for music with an even broader set of media extenders and a NAS-like Media Hub. But what made them special is that they showcased a vision that promised video was coming into the mix shortly and that what I was missing would soon arrive.

This gave me hope that my wishes would soon be met and a little hope goes a long way toward creating a better tomorrow.

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