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InfoGear upgrades phone of the future

June 10, 1999

Web posted at: 11:36 a.m. EDT (1536 GMT)

by David Needle

(IDG) -- Last year, InfoGear Technology got plenty of oohs and ahs for its iPhone, a telephone that could let you surf the Web.

But the device's slow modem, hard-to-read screen, and high price didn't attract many buyers -- only about 15,000 active users, according to InfoGear Chief Executive Officer Ed Cluss.

Enter the new iPhone, which addresses the most common complaints about the first model. "This is the phone they should have built the first time out," says analyst David Coursey, editor of the Coursey.com e-mail newsletter.

The iPhone features an integrated Web browser, tiltable 7.4-inch gray scale touchscreen, an e-mail client, a 56-kilobits-per-second modem, two phone jacks, a full duplex speaker phone, and a keyboard that slides under the phone to save space. Hardware for a digital answering machine is also built in, although that functionality won't be available until later this summer via a software upgrade, available over the Internet.

The iPhone's current fifth-generation software is much easier to install than PC software -- in fact, InfoGear says, there's no real installation. When a new application is available, an icon appears on the iPhone's screen. Press the icon and the new software is transferred to the system, a process that takes a minute and a half at most, according to Cluss.

InfoGear doesn't set the price for the iPhone, but defers to its resellers. For Internet service, InfoGear refers customers to Big Planet, but you can also go with your own service provider. Big Planet is also InfoGear's preferred online retailer; it lists the iPhone for $299, plus service plans.

Competition from cheap PCs?

Even though the low end of the PC market is in the same price range as the iPhone, and threatening to drop further, Cluss says he isn't worried. "The reason low-cost PCs aren't in more homes than they are already is ease of use and support issues," says Cluss. "People are worried about having to upgrade and breaking the PC. We're very focused on these issues and we've tried to create a simple, reliable device."

The market for information appliances like iPhone is set to explode, by some analysts' reckoning. "Consumers are looking to obtain the benefits of the Internet without the bulk, the complexity, and cost of the PC," says Sean Kaldor, a vice president with research firm International Data Corporation. "1999 will be a formative year for Internet screen phones as numerous companies such as InfoGear come to market in response to consumers' needs for fast, easy, and convenient access to the Internet."

Not a WebTV wannabe

While some of the iPhone's advantages sound a lot like a marketing pitch for WebTV -- it provides convenient, low-cost access to the Internet and e-mail -- Cluss says the iPhone addresses a different set of needs.

"PCs and TVs are things that people tend to sit down and watch for hours at a time," says Cluss. "The idea for the iPhone is that it sits in a heavily trafficked area of the house, like an entry way or the kitchen, and you typically will spend three to seven minutes on it, checking or sending off an e-mail, getting a weather report and so on."

While WebTV tries to appeal to newbies, Cluss says most iPhone users already own a PC. "The iPhone is for people who have an oven," says Cluss, "and now they want a microwave."

Cluss also argues the iPhone is a more private device because it lets you can dash off a short e-mail or read a message in private, whereas a desktop PC or a WebTV device uses a display that's viewable by anyone in the room.

The iPhone can't handle streaming media or multimedia games. "You can go anywhere you want to on the Internet using the iPhone, but you can't play Quake or run multimedia applications. It wasn't designed for that," says Cluss.