FOOL ON THE HILL
An Investment Opinion
Visor Steals the Show at Internet World Yi-Hsin Chang (TMF Puck)
October 11, 1999
Last Thursday, I spent a couple of hours at Fall Internet World '99 at the Javits Convention Center here in Manhattan. The exhibition was huge. I don't pretend that I saw everything at the show -- far from it. But I did learn about some very interesting Internet businesses, including several that were downright exciting.
The first thing I saw when I arrived at the convention center was a couple of guys wearing these large, red, bean-shaped costumes with the word "beenz" emblazoned across their chests. The postcards these guys were handing out said beenz were "the Web's currency" (uh, yeah, whatever). I later checked out the beenz website and learned that by signing up, you can earn beenz "simply by surfing the Web." You can then use the beenz you collect as credit to shop online at certain sites. Hmmm.
The second thing I encountered were these guys dressed as Santa Claus. They were handing out Santa hats (for inspiration I'm wearing one as I'm writing this). The site they were promoting: IveBeenGood.com. As it turns out, the site hasn't yet launched, though the home page says that you will be able to have a "one-click holiday" by registering your holiday wish list with the website. Apparently, IveBeenGood.com was using Internet World to preview the "coming soon" website. This is cute, though I'm not convinced of the profitability of its business model, especially if and when the likes of Amazon follow suit with their own wish lists.
As one might expect, many of the heavy hitters in the Internet business were at the convention with prominently positioned booths. These included Microsoft, America Online/Netscape/CompuServe, CMGI, IBM, Oracle, and Intel. I was a little surprised to see UPS and its gigantic booth, but I quickly remembered that the shipping company is now emphasizing its e-business solutions and is the biggest shipper of Internet orders. (An aside: I asked a UPS representative when to expect the company's mega-IPO, and he said November -- stay tuned.)
One company I especially liked was a Singapore-based firm called MediaRing.com. Get this: The site allows you to make free PC-to-PC voice calls to any place in the world. That means I can chat with my good friends in Hong Kong at no cost (except my Internet connection and electricity to power my PC) using my computer (and the microphone MediaRing gave me) so long as my friends and I download the free MediaRing software from the website. How cool!
Another interesting site was Hands Off the Internet, a group advocating for an unregulated approach to Internet content and access. Then there was a company promoting a new product dubbed "InternetCash," which will resemble a prepaid calling card except this is for use as a debit card of sorts at participating Internet stores. The idea is that consumers will no longer need to use a credit card -- or give out a credit card number via the Internet -- to make purchases online. InternetCash is supposedly coming to a store near you in November. I'll reserve judgment until the company actually announces the names of participating retailers on- and offline.
I got a kick out of the PricewaterhouseCoopers booth. I swear, they had a magician doing a spiel on the consulting firm. I found irony in the whole situation -- a magician using tricks and mirrors to convince passersby of these consultants' so-called "services." It makes you wonder if these consultants are merely performing magic tricks themselves.
The most exciting and, I dare say, the most popular booth was that of Handspring. A large crowd gathered around to see demonstrations of the young company's new Visor handheld organizer. In case you didn't know, Handspring was started in July 1998 by the creators of the original PalmPilot. Its CEO, Donna Dubinsky, was formerly the president of Palm Computing. Its chairman and chief product officer, Jeff Hawkins, invented the Pilot and the PalmPilot and founded Palm Computing. And its head of marketing and sales was vice president of marketing at Palm Computing. Notice a pattern yet?
In short, the people who made the Palm what it has become left 3Com and started their own company to make a new-and-improved handheld organizer. The Visor is definitely that. The Visor is based on the Palm operating system, but it offers expanded features such as a scientific calculator, a world clock, and an advanced datebook.
What's even more impressive is that the Visor has a Springboard expansion slot that allows users to add software much the way you would pop a game cartridge into a Gameboy. With a click of a module, the Visor can be transformed into an MP3 player, a pager, or a video game. You can also snap in a modem module or a backup module, which essentially serves as a backup disk -- no more synching!
The Visor also comes in five colors: ice (translucent), green, blue, orange (looks more like yellow), and graphite (a la the Palm). The bright colors immediately made me think of Apple's whimsical iMac computers. The Visor (2MB memory) starts at $149.99 without the cradle, while the Visor Deluxe (8MB memory) starts at $249.99. That's why 3Com has significantly cut the prices on its Palms of late.
The Visor was such a success at Internet World -- people wanted to buy them on the spot -- that Handspring's website was down for several hours late last week as it was overwhelmed by demand. At last check, the company's online store is "temporarily unavailable," and Handspring is directing customers to place orders through a toll-free number (current orders are expected to ship by the end of October).
In my humble opinion, 3Com (Nasdaq: COMS), which plans to spin off its Palm Computing unit, is in some hot water. The Visor represents the biggest threat to Palm's grip on an overwhelming share of the handheld computing market. As a dedicated Palm owner and user, I see Visor as a better product. If I were buying an organizer today, I would buy a Visor (in traditional graphite) instead. It's a more technologically advanced offering that gives you more bang for your buck. That's gotta hurt 3Com. Palm Computing will have to take its performance up several notches to keep customers from switching over to Handspring and to prevent the Visor from out-Palming Palm.