A resurgent Toshiba plans to put in place an ambitious mobile computing strategy based around wireless services that was outlined this week at TechXNY. In this interview, Oscar Koenders, Toshiba's vice president of Worldwide Product Planning, explains how ubiquitous wireless computing is going to transform Toshiba and the way we work and live.
Q: How would you describe Toshiba's overall strategy?Koenders: Our strategy going forward is focusing on three things. One is very clearly mobility. The second thing is wireless, and the third thing is digital convergence. We have exited the desktop market because we believe that the desktop market is basically a declining market and Toshiba's strength was not helping us out in that particular area. Our focus is now, again, clearly on mobility, and in order to drive mobility much faster than what the market is doing today, we're going to push wireless and digital convergence.
Q: So in general, you plan to be more aggressive in this particular space?Koenders: The U.S. market is split between desktop and notebooks. It's about 30 percent notebook and 70 percent desktops. Our goal is much more towards the 50/50 [split], something which is already happening, actually, in Japan. In order to do that, we have to enable people to go mobile, and that's exactly what we're doing. In March, when Intel was launching its Mobile P4 platform, we were right there with them, with three platforms ready. None of our competitors were actually ready so we had about a 30- to 60-day lead on most of them. During that time, you saw that we gained a whole lot of market share. We gained the No. 1 position globally and we gained the No. 2 position here in the United States.
Q: Are you or anybody else actually making money selling notebooks?Koenders: It's tough. But because we were able to use some of the technologies much earlier than anybody else, from a profit point of view, this is a very good situation for us to be in. In Q4 of last year, our No. 1 selling notebook was a notebook which sold [for] under $1,000. There's not a lot of money to be made on those types of notebooks. But on the other side, the No. 2 selling notebook was a $1,999 model. We put so much technology in that box, which nobody else had available, that we were able to take up that price point. Going forward, we currently have a product on the road map which is even at $2,499. Traditionally, we introduce about 10 new technologies every year, which come out of our labs and that are going to be copied at some point in time by the rest of the market. Already, in the first three months of this year, we did eight of those technologies.
Q: In terms of wireless technologies, what areas are you focused on?Koenders: We are currently focused on 802.11b, simply because when we started back in '99 that was the only available worldwide standard. In our current Tecra line, we are already ready to make the move to 802.11a, even though the cards that you need are not available yet. Currently, if you buy the product with wireless LAN integrated, it is the B standard. If customers want to switch over at some point in time, they can, without having to change the product.
Q: How hard is it to set up a wireless network?Koenders: One of the initiatives we started some time ago was in the server business. Now, our goal was not to enter the server business, but [to] enter the mobility-enabling business. We have a very small self-contained box, which if you just plug it in you are immediately wireless enabled at that location. It's an appliance server based on a Linux operating system. It basically automatically allows you to set up a network just by switching on the power.
Q: Where do you take that kind of capability next?Koenders: The next thing is in public spaces. We're going to do that very different from what is currently happening in the market. Today, people are focusing on the main traveler hotspots, like airports or train stations. So the number of access points which are out there today is very, very small. In order to make it possible for people to get high-speed wireless access in anyplace, we have to do a lot of work. That's exactly what we're going to do. There are some difficulties that some of the hotspot initiatives have suffered from. The cost of the hotspot, for instance, was too expensive. And with so many connections, we know that it's not going to be 100 percent connected all the time -- at first. We want to take things one step further, because now we're roaming between wireless and LAN subnets. So the next step, of course, is roaming between wireless LAN and 3G data communication.
Q: How will that manifest itself?Koenders: If you're sitting in a location in a hotspot and you're using your PDA, you have an Internet connection. Of course, at that point in time you would also be able to make a voice-over-IP call using your PDA. Now if you walk out of that location, out of the mall, you will get out of range of the wireless LAN. At that point in time, the PDA will switch automatically to 3G communication, without you losing the voice call. But if you get into the car and drive back to the office, you would get back to the office and then go back to your wireless LAN, [and] the PDA would again automatically switch back to your wireless LAN to make sure you have the lowest possible cost for that connection. The technology should figure out where you are instead of you trying to figure out what technology is at the place you are.
Q: Are you working with service providers to deliver that?Koenders: We haven't defined a business model behind that yet. What Toshiba has been doing is developing the core technology to make it possible. The technology we developed is to create a seamless and almost instantaneous handoff between the various technologies. The way we tested it is we had a notebook running a full-screen movie, and then drove around from hotspot to hotspot to 3G antenna at a speed of 50 miles an hour.
Q: How will all this change the way people interact with their notebooks?Koenders: We knew, about a year ago or so, that people are going to take their notebook into different locations much more than they already do. When we talk about road warriors, everybody knows what that is. We have added a term, which is called "corridor cruisers." These people just normally went into a meeting and just took notes and then went back to their PC on the desk and typed in their notes or whatever they did with it. They were not bringing their notebooks with them because they could not get up-to-date information in those meetings. So we're going to use all the technologies we've got, in a very thin machine, to make sure that we have a very strong offering when we introduce the Tablet PC. And that's going to happen somewhere in Q4 of this year.
Q: Is the Tablet PC a niche product or the future of notebook computers?Koenders: It's certainly not a niche. It's just the evolution of a notebook. I think it's going to be widespread.
Q: Where do handheld devices factor in?Koenders: Our intent is that anything which is priced today around $399 is going to be a Pocket PC device rather than a Palm. The first part of our Pocket PC strategy is make Pocket PC available to a much larger customer group, and therefore give that customer group access to more applications than they are used to now in their PDA. And we're going to take the PDAs and integrate much more technology than what is currently available. For example, in the future we will integrate wireless into the same form factor.
Q: And finally, where does convergence factor into all this?}Koenders: There is no doubt in my mind that anything which is currently using some form of communication is going to go over IP, and that's not just voice. That's going to be video and TV signals. Everything is going to go over IP. Everything is going to go IP. So in the future, music is going to be digital music over IP. And of course, that's where Toshiba can play in much, much more than the traditional computer companies can do. We'll show an appliance server which is basically to be your jukebox of digital music, your jukebox of digital photos and video, and is going to give you a wireless Internet in your home. And also, because there is a VPN [virtual private network] loaded on that machine straight out of the factory, wherever you are in the world you can have access to the Internet. You can connect back into your home. And the last thing we're offering as a product in the home is security cameras, which can be connected directly to this appliance.