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lkj and others, from WSJ a few days ago, hopefully not posted already:
Hot E-Products Jolt
Technology Giants
By EVAN RAMSTAD
Staff Reporter of THE WALL STREET JOURNAL
Coming soon! The Web on a little TV in your kitchen!
Robert Lamson, the man who brought the nation the Breadman bread maker, the Juiceman juice maker -- and the infomercials that shouted their benefits -- has a new gizmo: Digital Icebox, a television-keyboard-compact-disk player that will let cooks shop online while making salad and watch Oprah while making dessert.
Mr. Lamson has won backing from Sweden's Electrolux AB and Celsius AB for his unlikely gadget, which will retail this spring for $499. He will unveil it at the giant Consumer Electronics Show in Las Vegas Thursday, underscoring a big shift in the industry: a wave of innovation from small shops outside the world of Panasonic, Sony, and the other giants.
Other recent examples include the digital music players that swarms of Web surfers use to play songs downloaded from the Internet. They first came from Diamond Multimedia, a supplier of cards to the personal-computer industry.
Personal video recorders that save TV shows to hard drives, introduced last year and now getting splashy promotion, came from TiVo Inc. and Replay Networks Inc., two Silicon Valley start-ups. WebTV, one of the first products to offer the Internet on a TV screen, came from a start-up company subsequently acquired by Microsoft.
"In the past, we knew who the competitors were and we were looking at each other and knew what was going to happen in the next three years," says Takafumi Asano, president of Pioneer Corp.'s U.S. subsidiary. "But now, it's hard to predict."
The product that Mr. Lamson's company, CMi Worldwide Inc. of Seattle, faces some big hurdles, and other companies have stayed away from its unusual niche. WebTV, priced from $99 to $250, is perhaps the most similar product available now, but it operates as a set-top box apart from a TV.
Digital Icebox has a 9-inch screen and a wireless, gasket-sealed keyboard that can withstand food spills and is washable under a faucet. Designed by Mr. Lamson's engineering partner, Robert Harrison, the first model of the keyboard was criticized by Mr. Harrison's wife as being too thick. He then shrank it down to about the size of a waffle.
The development of Digital Icebox began after Mr. Lamson sold Juiceman and Breadman to appliance giant Salton Inc. in 1993. At first, Mr. Lamson and Mr. Harrison set out to build what they thought would be another indispensable kitchen time-saver: a bagel maker. But the public didn't bite.
Mr. Lamson says he and Mr. Harrison were looking for the next microwave oven but decided the next big kitchen appliance would have to connect the television to something else. Relying on focus groups and market research, the partners soon discovered a gender difference in the way consumers thought about what came to be Digital Icebox.
Men, Mr. Lamson says, were interested in the product's technical aspects but "weren't interested at all about what the product would do." But "women were saying, 'Where would I put it?' 'My husband could learn to cook.' They immediately started to talk about how interesting it would be."
By spring 1994, the pair started work on a combination TV and CD player, focusing on an overlooked niche of the TV-making business, 9-inch sets designed for kitchen use. While unglamorous, at $200 to $300 such sets are generally priced higher and yield more profit per unit than 13-inch and even some 19- and 20-inch sets.
The partners thought that in addition to playing music and TV shows, their device could play CD-based electronic cookbooks they would create. With both Juiceman and Breadman, Mr. Lamson also sold recipe books, videotapes and even bread-maker mixes.
"We learned that the important thing is to try to develop loyalty and interest on the part of the consumer," Mr. Lamson says.
Multimedia personal computers were taking off at the time and Mr. Lamson believed the TV-CD combo, to be called Kitchen Coach, would fit in the kitchen better than a PC. But he had a tough time raising money. Bankers and venture capitalists in Silicon Valley and Seattle turned him away.
One banker, however, introduced him to Sweden's Electrolux, one of Europe's largest kitchen-appliance firms, which agreed in 1995 to invest $2.5 million in the concept. But Mr. Lamson ran through the money making prototypes and testing them. After several months of knocking on doors, he raised $5 million from private investors in Norway. Meanwhile, Salton, which is based in Mount Prospect, Ill., agreed to help distribute the product.
In early 1998, finally ready to take orders for Kitchen Coach, CMi showed it to retailing executives alongside a prototype that had Internet access. "The response was, 'I want the one with the Internet in it,'" Mr. Lamson says. "It was a disappointment."
Over the next few months, Mr. Lamson and Mr. Harrison scrambled to put together the computing innards for their revised model. They considered Microsoft's Windows CE operating system but decided it was too complex. Instead, they turned to one from Wind River Systems Inc. of Alameda, Calif., and chose browsing software from Spyglass Inc. of Naperville, Ill.
The company later added connections for two closed-circuit cameras that could be used, for instance, at the front door and in the baby's room. A version with a flat LCD screen instead of a tube television will be sold through custom-home builders for around $2,000.
In total, Mr. Lamson and outside investors have put $13.5 million into the product's development. CMi hopes to make extra money by selling ads for an Internet portal that will be the first thing the Digital Icebox accesses online. Mr. Lamson also hopes to strike a deal with an Internet service provider that will allow CMi to sell the Digital Icebox for $99 when a customer commits to a multiyear Internet subscription.
Once again, Mr. Lamson will use lengthy infomercials to push his product. "The kitchen as a marketplace is marvelous," he says. "It's increasingly becoming a social and decision center as well as the place to cook and eat."
Some tech-industry veterans say Internet technology is changing too quickly to be built in to a TV. "There's a lot of fluidity that is not part of the deal with television," says Van Baker, a Gartner Group/Dataquest analyst who follows the Web-device market. "People are used to getting seven to 10 years of life out of a TV."
And other television makers may be close behind. TeleCruz Technology Inc. of San Jose, Calif., is marketing a chip set to TV makers that allows Internet access. And Echostar Communications Corp. recently made WebTV's Internet technology a feature in the receiver for its digital satellite-TV service.
Write to Evan Ramstad at evan.ramstad@wsj.com
Regards,
Marty |
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