PCs In Easy-To-Take Tablet Form

Sound like the same hype you've heard in the past? Maybe. But a growing number of integrators are stepping up their efforts to add full-size tablets to their mix of offerings,not PDAs, but large-screen devices that run full-blown versions of Windows, from vendors including Fujitsu, SonicBlue and ViewSonic.

Why now, after more than a decade of failed promises, should solution providers believe these devices present a viable opportunity? One reason is new tablets released in recent months are driving down price points. Also, 802.11b wireless LAN gear is now considered commercially viable. But the most noteworthy reason some solution providers smell gold is the expected release of Microsoft's Windows XP Tablet PC Edition platform later this year.

Based on the complete Windows XP Professional Edition, Microsoft is optimizing the OS for touch-screen input and ink overlay, treating ink as a separate data type. It will support both handwriting recognition and speech.

Having lined up roughly a dozen PC-makers and three chip-makers (Intel, Transmeta and Via Technologies), Microsoft chairman and chief software architect Bill Gates believes this time the technology is ready for mainstream office computing. After pulling the plug on its widely publicized Windows for Pen Computing in the mid-1990s, as well as other high-profile efforts to advance the tablet by companies such as Go Computer and Grid Systems evaporating, there's every reason for solution providers and IT managers alike to be skeptical. But Gates insists the time is right.

"The tablet is a great example of something that has required a lot of patience," Gates said in his keynote address at Fall Comdex in Las Vegas last November, where he unveiled the Windows XP Tablet PC OS. "It's only now with the advanced hardware and the software breakthroughs that it's ready for prime time."

Key notebook suppliers supporting the new OS include Acer, Compaq, Fujitsu Personal Systems, NEC and Toshiba, along with companies better known for other products, such as ViewSonic and Tatung.

To be sure, not everyone is convinced there's a significant market for tablets. IBM last month confirmed it's withdrawing its ThinkPad Trans-Note device, a hybrid notebook-tablet unit, while saying it has no plans to release a system based on the Windows XP Tablet. And Hewlett-Packard has said it has not decided whether it will offer a tablet PC.

While market researcher IDC has yet to release any formal forecasts on tablet PCs, analyst Alan Promisal says at best they will account for 1 percent of all portables that are shipped a year after the first models are released, 5 percent after two years and maybe 10 percent after three years.

"I think the ramp-up on tablet PCs will be very slow. It will be an educational process for Microsoft to convince IT managers that this is a viable portable-PC solution," Promisal says. Considering subnotebooks still only account for 8 percent of the portable PC market, that could be a challenge, he adds.

But for many solution providers, what tablets may lack in volume, they can make up for in margins. "I can't say what our margins are, but from my experience in the industry, it's safe to say the typical margin on a rollout of tablets is 20 to 23 percent," says Lou Panetta, vice president of marketing at Mobility Concepts, a national solution provider based in Naperville, Ill., that currently sells all,albeit few,of the tablet PCs now available that run Microsoft Windows 98 and Windows 2000. Those include the devices to be discussed later in this piece,the market-leading Fujitsu Stylistic 3500, the recently released ViewSonic ViewPad 1000 and ProGear by SonicBlue (the latter is also available with a Linux client).

By comparison, the margins on notebook-based solutions are, at best,

4 percent, Panetta says. As the new entries extend the competitive landscape, Panetta predicts margins on tablets will be "squeezed," but he believes the need for tablets will grow in vertical markets, including retail, health care and insurance,not the lower-margin, knowledge-workers Microsoft is going after.

"Microsoft talks about mobile-office workers needing tablet PCs so they can carry them around and take notes in meetings, but I'm skeptical whether that will be a viable use for that device," says Panetta, who in the late 1990s was president of Fujitsu Personal Systems.

While costs for hardware will come down, Microsoft's Windows XP Tablet PC SDK should simplify software development for developers and resellers by providing a common reference design and set of APIs.

"The reseller community involved in software development will find it much easier to sell these projects, because it radically changes the method of looking at investment cost," says Doug Smith, president of Filbitron Systems Group, a solution provider in Markham, Ontario.

Despite the larger margins for tablets, Mobility's Panetta notes the average sale today for vertical applications is 200 to 300 units, but perhaps more notable, the typical sales cycle is 18 months, compared with several days for notebooks. But once an organization has bought into tablets, development-cost margins can be quite healthy. "We can cookie-cutter them," Panetta says. Plus, the customers tend to need more training and support than those buying traditional desktop or notebook solutions.

John Ognissanti, a senior consultant for Manchester Technologies, Hauppauge, N.Y., agrees, though with the recent entries, he argues the margins on tablets are comparable to that on notebooks. Ognissanti says tablets do offer the potential for other high-margin services, such as configuring and selling wireless services, consulting and value-added support such as extended warranties, 24-hour service, and integration.

What We Looked At

The tablets discussed below are all equipped to run Windows 98 or 2000-based applications, have pen and inking capabilities, and are targeted for mobile workers such as health-care professionals, insurance-claims adjusters and field-sales reps. They are all based on a similar size and form factor. Although the ProGear and ViewPad are relatively new entries for both companies, Fujitsu has offered Windows-based tablets for nearly a decade. Other options that run full versions of Windows include industrial "ruggedized" devices from the likes of Intermec Technologies, WalkAbout Computers and MicroSlate. The Casio FIVA also runs Windows 98/2000, though it is smaller than full-sized tablets.

Fujitsu Stylistic 3500

Few will dispute Fujitsu is the leading supplier of pen-based tablet PCs. Its current flagship, the Stylistic 3500, is offered with three different types of displays, all of which are 10.4 inches. One is an XGA TFT display for indoor-only viewing. Another offers SVGA TFT for those using it outdoors. The top-of-the-line 3500R has a Reflective SVGA TFT display.

All of the 3500s are powered with a 500-MHz Intel Celeron 1.1 low-voltage processor and come bundled with a choice of Windows 98 SE, 2000 Professional or NT 4.0 Workstation, a 15-GB shock-mounted drive and 128 MB of SDRAM, upgradable to 256 MB. For those requiring a faster processor, Fujitsu also offers the LT P-600, based on a 600-MHz Pentium III, though it has a

smaller 8.4-inch display.

The 3500 tablet is most widely used for sales-force automation and health care, but has applications in other markets, notes Tom Bernhard, Fujitsu's director of product marketing for pen-based tablets.

For instance, DBK Concepts, an integrator in Miami, recently deployed a solution for Mosaic Info Force, a market research and marketing services agency. The deployment comprises 2,000 Windows 98-based tablets, allowing its researchers to gather data in the field, typically at retail locations, using statistical data for sales, marketing and supply-chain optimization.

Mosaic insisted on a device that it could give to reps who were not computer-literate and wouldn't be comfortable with a heavy or industrial unit. Yet the unit needed to support an attached Symbol Technologies bar-code scanner, says DBK Concepts CEO Danny Katz.

Besides the form factor, Fujitsu has one thing going for it that none of the other tablet vendors have,a history of commitment. "A lot of tablets have come and gone, but Fujitsu has stuck with [tablets for over a decade," says Katz, who complains he's sitting on a pile of tablets that Toshiba suddenly discontinued in the late 1990s. "We can tell customers, Fujitsu's in it for the long run."

In terms of features, support and weight, solution providers give Fujitsu high marks. Perhaps its biggest shortcoming is price, some say. The 3500 can command a two to three times premium over the ViewPad, Manchester's Ognissanti says. But depending on the application, it may be worth the added cost. "You can drop them from 4 to 5 feet and they won't break, and you don't have to worry about spilling anything on them," Ognissanti says.

Battery life is roughly three hours, and an optional flat-sized battery should extend operation to 10 hours. The bottom line is the Stylistic 3500 commands the price premium for the time being. Says Filbitron's Smith: "[Fujitsu does a good job at shock-mounting the drives, and the company paid a lot of attention to detail."

SonicBlue ProGear

Can a company with a core business of selling consumer-electronics products such as the ReplayTV be a contender in the commercial-tablet PC space? Critics say the SonicBlue ProGear could be a one-hit wonder, and that presumes that it's even a hit the first time around.

Shipping since last summer, Mobility Concepts is the primary solution provider selling the 3.5-pound ProGear , which is only a hair bigger than a letter-sized page and 1-inch thick.

At this point, ProGear could face an uphill battle. While a solid device, it's less known by VARs than the ViewPad or the Stylistic 3500. Moreover, SonicBlue, with 2001 revenue of only $214 million, is struggling to return to profitability after posting a $62 million loss.

Jack Loane, Mobility's director of marketing, says the ProGear is being piloted for a major auto-dealer application. Although only about 100 ProGears are being used for the pilot, if it succeeds, the deployment could extend to thousands of dealer locations with diagnostics and schematic applications. Loane declined to elaborate, however. The system would require the deployment of 802.11b wireless LAN infrastructure.

The ProGear does have some unique characteristics. It's powered with a 400-MHz Transmeta TM3200 processor and is available with either the Mobile Linux 2.4 client running Netscape Communicator, or Windows 98 SE, but no one has yet expressed serious interest in the Linux version, Loane says.

Also, the ProGear comes in a magnesium case with rubber side panels and includes a customizable screen cover and battery case. Standard memory is 128 MB with a hard drive offering a modest 5.5 GB of capacity. It is available either with a built-in 802.11b wireless card with an embedded antenna or a PC Card slot. A USB keyboard is optional as is a cradle with an integrated four-port USB hub and two-battery charger.

The system costs in the neighborhood of $2,000. SonicBlue says it's willing to offer customized versions of the device for large orders.

ViewSonic ViewPad 1000

ViewSonic, best known for its monitors and display technology, has gained extensive mindshare with the ViewPad 1000 since its release late last year.

Although it has announced plans to support the Windows XP Tablet, ViewSonic decided not to wait a year before releasing its first device. The ViewPad 1000 is powered with an 800-MHz Intel Mobile Celeron processor, which runs Windows 2000 Professional.

The ViewPad 1000 has a standard 10-GB hard drive and comes with 128 MB of SDRAM, upgradable to 512 MB. Despite selling for less than $2,000,much less than the Fujitsu 3500,ViewSonic officials aren't going after Fujitsu's leadership position, which is roughly 70 percent, according to industry analysts.

"Fujitsu is clearly the major player in the tablet market," acknowledges Tom Offutt, general manager of ViewSonic's mobile and wireless division. "We want to be the No. 2 alternative; then we'll be a player when others come into the market."

While it remains to be seen whether the strategy will give ViewSonic a decided advantage over tier-one vendors, resellers definitely seem to be taking note of the ViewPad, some of whom are less than thrilled with ViewSonic's channel strategy; Tech Data is the national distributor.

"It's not as competitive price-wise for a project than deals we work with on a direct basis," Mobility Concepts' Loane says. "When we are initiating a relationship, that's a key differentiator. But there's a lot of interest in that product."

In addition to the price point, other notable features include a built-in camera, which takes low-resolution photos (640 x 480), a sharp display and a built-in Fast Ethernet card, a 56K modem and 802.11b wireless adapter.The ViewPad is popular in medical offices and hospitals, notably because of its bright and crisp 10.4-inch SVGA display, a key criteria for running point-of-care applications.

The unit's built-in camera, described as a gimmick by some, is suitable for insurance-claims adjusters, who can capture an image or 15 frame-per-second streaming video clips in the field and attach them to a claim form.

Weighing 4.3 pounds,light by notebook standards,some potential customers might consider it on the heavy side when used as a tablet, particularly if it is to be carried around, several solution providers say. The system comes with a wireless external keyboard that connects via infrared, making it suitable as a hybrid subnotebook. It's less suited to mobile workers because of its weight and lack of shock mounting and port location, Filbitron's Smith notes. "We've shown it to people, but we're dealing with experienced users, and they've written it off pretty quickly as a mobile computer," Smith says.

Still, between its low price point and some niceties that include one-touch buttons for launching Internet Explorer and Outlook Express, it's worth looking at for solution providers considering entry to the tablet PC market.

That's what Glen Jodoin, vice president of operations at GreenPages, a Kittery, Maine-based solution provider, is doing. The ViewPad is the first,and currently only,tablet offered by his company, whose core business is PC, notebook and network integration.

"We haven't closed any big deals, but these don't close in a day," Jodoin says. "You have to get buy-in from line-of-business, then buy-in from the IT department,and then we have to roll out the solution." n

Jeffrey Schwartz is a freelance writer based in Westbury, N.Y. Contact him at [email protected].