The Secret To Device Success · MARKET OVERVIEW Device Makers Pursue New Category Success Both PC and consumer electronics (CE) makers expect to win in creating new digital product

T H E F O R R E S T E R R E P O R TD E C E M B E R 2 0 0 1

The Secret To Device Success

©2001, Forrester Research, Inc. All rights reserved. Forrester, Forrester eResearch, Technographics, and TechRankings are trademarks ofForrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copyor slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usageinformation, go to www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and aresubject to change.

D E C E M B E R 2 0 0 1

The Secret To Device Success

Device makers should: 1) focus on a common, cumbersome

behavior, and 2) maximize usability, not technology. These

criteria give PC makers an edge in new devices.

M A R K E T O V E RV I E W• PC makers like Apple and HP tout software integration.• Consumer electronics leaders pursue digital simplicity.• Consumers trust PC and CE manufacturers equally.

A N A LY S I S• The R&D trap misleads device makers.• Focus on behavior, not technology.• Products that excel at usability, like Sony’s CLIÉ, will win.

A C T I O N• Don’t let price points get in the way of usability.

W H AT I T M E A N S• CE companies acquire integration experts.

R E L AT E D M AT E R I A L• Four device-specific briefs are available online in the PDF of

this report.

G R A P E V I N E

E N D N OT E S19

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By Bruce Kasrel

With Josh Bernoff

Carl D. Howe

Jason Sorley

Headquarters

Forrester Research, Inc.

400 Technology Square

Cambridge, MA 02139 USA

+1 617/613-6000

Fax: +1 617/613-5000

www.forrester.com

The Forrester Report

M A R K E T O V E R V I E W

Device Makers Pursue New Category Success

Both PC and consumer electronics (CE) makers expect to win in creating

new digital product categories. CE makers cite their track record in new

product introductions, while PC makers say that they excel at hardware

and software integration. Consumers like both equally.

NEW CATEGORIES ATTRACT PC AND CE VENDORSWhat’s the holy grail of hardware? Creating a new category and dominating it. Thisreport examines how personal computer and consumer electronics companies approachthe creation of new digital devices. So far, both PC and CE companies have a spottyrecord. While Internet appliances like 3Com’s Audrey and Sony’s e Villa failed, MP3players and PDAs took off. To analyze what drives new device success, we interviewedexecutives at 25 leading PC and CE firms on their design and marketing methods.

Both PC and CE Companies Say Digital Is The Main Ingredient All device makers behave according to their heritage -- whether it’s making PCs or buildingconsumer electronics.1 Either way, they strongly believe that putting the “digital” label on their products excites consumers. New technology increases not just the technicalcapabilities of devices, but also the emotional appeal.

“Our research shows that consumers like digital products. With CDs, DVDs, anddigital television they have seen that digital is superior. If they walk by one of ourHDTV sets in a store they see that it is better, and this gives them the feeling thatall our digital products have that ‘wow’ factor.” (Consumer electronics company)

“The PC industry has been putting digital technology and user interfaces in frontof people for years. The CE industry has only been doing it for a few years, but itis the direction in which the industry is headed.” (PC company)

PC Makers Differentiate By Operational Speed Or Software Integration Now that PCs are a mainstream product, leaders like Apple Computer and Hewlett-Packarddifferentiate themselves by focusing on hardware and software integration. Other PC makerssucceed by making incremental improvements.

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DECEMBER 2001 ©2001 Forrester Research, Inc. Reproduction Prohibited

The Secret To Device SuccessM A R K E T O V E R V I E W

“We focus on the integration of hardware and software. Building hardware is easy,doing software is hard. We make sure it all integrates by putting smarts on bothsides so that the devices know what is on the other end of the wire.” (PC)

“The PC industry value-add is operational excellence: It churns out new productsquickly. They all may look the same, but manufacturers can get these new productsto market in six months. Compaq sold a lot of iPaq PDAs, and now all the PCcompanies make theirs to similar specs.” (CE)

CE Makers Create Categories, Then Focus On Price PointsIn contrast to PC makers, CE vendors like Sony and Philips thrive on being first-to-market with new gadgets and technological innovations like DVD, home theater, andpersonal stereos. Once these categories are established, CE companies rapidly becomeconcerned with meeting consumer price points, often holding back costly new features.

“The CE players are good at setting up new categories -- but where they didn’tinvent it, they drag their feet. It took them months to add MP3 support to CDplayers, even though it added only $4 to the cost of the player.” (PC)

“Our digital products will generate more revenue than nondigital products, so weshifted our research that way. The research is different, but the market is the same --we still have to design these products for lower and lower price points.” (CE)

BOTH PC AND CE HAVE BUILT STRONG TRUST WITH CONSUMERS After years of providing new products to consumers, both PC and CE players have builtup a loyal following of core users. We surveyed them and identified two groups of earlyadopters: technology-focused and entertainment-focused.2 These heavy users:

• Eschew convergence devices. Internet appliances like the Netpliance’s i-openerand 3Com’s Audrey barely lasted six months in the marketplace, despite beingcheaper and easier to use than a PC. Combination devices like the HandspringVisorPhone, a combination PDA/cell phone, also flopped.

• Want converged activities. While multipurpose devices have failed to gaintraction, consumers are open to moving existing activities and content onto newdevices. More than 20% of all consumers want to be able to see their snapshots on their televisions and listen to digital music files on their main stereo system (see the July 2001 Forrester Data Overview “Devices & Access North America:Consumer Technographics Data Overview”).3

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©2001 Forrester Research, Inc. Reproduction Prohibited DECEMBER 2001


Figure 1 Technology And Entertainment Consumers Like The Same Brands

• Like PC and CE brands equally. Early adopters in both camps look to brandslike Sony and Intel to provide them with trusted products (see Figure 1 and theNovember 27, 2001 Forrester Data Snapshot “Top Tech Brands Have CrossoverAppeal”).4 They don’t distinguish between PC and CE brands: Panasonic did wellwith the PC crowd and Microsoft scored high with entertainment fans.

CONCLUSIONSThe basic dynamics of new product development are that:

• PC and CE companies put digital into everything. Both expect that digitaltechnology will resonate with consumers.

• PC’s vendors improve incrementally; CE makers debut new categories. PC makers leverage their understanding of hardware and software. CE playersmust balance cost concerns as their business goes completely digital.

• Consumers don’t pick sides. Digital product users don’t distinguish between PC and CE brands. They expect and will trust new devices from either type ofcompany.

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Source: Forrester Research, Inc.

Average trust scoreBrand

Sony 4.14

4.02Hewlett-Packard

3.98IBM

3.91Intel

3.86AT&T

3.83Panasonic

3.81Amazon

3.78Dell

3.75Apple

3.73Yahoo!

Source: Consumer Technographics® 2001 North America Devices & Access Mail Study

Average trust scoreBrand

Sony 4.18

3.95IBM

3.89Microsoft

3.87Best Buy

3.86Intel

3.83AT&T

3.82Hewlett-Packard

3.82Panasonic

3.78Yahoo!

3.74Philips

PC-centric early adopters Entertainment early adopters

(1 [distrust a lot] to 5 [trust a lot])

A N A L Y S I S

Behavior And Usability Make Devices Succeed

Device success comes in two steps: 1) Design new products to target the

right user behaviors and, 2) execute a product that guides the user through

tasks. PC makers’ expertise at developing guiding software and device

connectivity will give them an advantage over their CE rivals.

DEVICE MAKERS ARE OUT OF SYNC WITH THE MARKETWho will reap the benefits of selling digital devices, PC makers or CE companies?Neither -- at least not easily. Both have major problems changing to build up new devicebusinesses.

• PCs’ enterprise complexity no longer plays in the home market. Consumersgot their first taste of the benefits of computing in the workplace and were willingto overlook PC complexity as long as applications like going online worked correctly.But the new imperative is simpler, more entertaining products -- enterprise-trainedPC makers are not ready for the challenge.

• Technology integration demands clash with CE simplicity. CE companiesoften think that adding technology is as simple as plopping on a new hard drive or digital feature. But new, connected products require skills in integration andsupport, where CE makers are weak.

PC Makers’ Heritage Of Complexity Makes Simplicity ElusiveFor the past 20 years, consumer PCs have benefited from a trickle down of technologyfrom the workplace. Innovations like broadband and wireless networking started in theenterprise and moved to the home. But this trend won’t serve new digital products well.Why? First, PC complexity won’t play well in the entertainment center. And second, theworkplace doesn’t create precedents for entertainment-focused activities.

• PC makers’ other devices have met little success. The Gateway DestinationPC attempted to make a high-end PC do double duty as the entertainment center.But the high price tag, complex TV user interface, and space and connectivity needskept it out of the living room. PC makers like Dell Computer, Compaq Computer,and IBM have yet to build a successful living room device.

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The Secret To Device SuccessA N A L Y S I S

• IT departments have made PC makers complacent. As long as businesses haveused PCs, IT technicians have been on hand to standardize configurations andsolve problems. The home environment has no support staff, so consumers mustwork out their own technical problems. Wireless networking works fine in theoffice, but frustrates a home user whose network mysteriously goes down when he places a call on a cordless phone or makes popcorn in the microwave.

• Work and home applications differ in substance and content. Consumersbrought word processing and spreadsheets home from the office. But newtechnologies aren’t the same at home. Shared network storage and automatedbackup negate the need for rewriteable CDs at work, while home users burn discs to make copies of music CDs or back up their family room computer. Broadband is fine at work for watching talking heads, but at home it can fail to deliver a full-screen video version of a movie trailer at acceptable quality.

CE Makers’ Simple Products Create Complex ProblemsEven as PC makers struggle with complexity, CE vendors are bedeviled by simplicity.CE makers are masters at simplifying complex technologies, but new digital devicescreate unexpected demands. While digital technology may drive up the “wow” factor atretail, it can also create a “yeow” effect as support and integration needs come to fore.

• Devices need software; software eats margins. Intel found out that existingaudio jukebox software like MUSICMATCH and Winamp didn’t work well withtheir MP3 offering; they had to build their own software to simplify transferringtunes. As this added software burden squeezed margins, Intel decided to exit thedevice market in October. If Intel can’t integrate software and hardware, whathope do Hitachi and Samsung have?

• Overly simple devices create software nightmares. Last holiday season, Sony’seMarker was flying off the shelves -- but it quickly became victim of its own success.The simple and small $20 device featured a single button that let users time stampa song on the radio then look it up later on Sony’s Web site -- creating confusion forusers and support problems for Sony. Device success created management problemsand sapped profits, so Sony had to give up on eMarker.

• Plug-and-play hardware creates more headaches. Integrated amplifiers andmultispeaker bundles helped launch home theater into more than 20 million UShomes. It may make movies sound better, but it creates user problems, such ashaving to adjust the volume of the TV from the receiver using the cable box remote.Even if the gear is from the same maker, it often has trouble interoperating.

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USER BEHAVIORS SHOW THE PATH TO NEW PRODUCT SUCCESSWhen it comes to designing new products, PC and CE companies have trouble escapingtheir heritage. The problem: Both concentrate too much on technology and not enoughon people. They spend hundreds of millions of dollars researching and developing newtechnologies that then try to incorporate it into as many products as possible. This R&Dfocus skews product development in directions consumers may not want.

To avoid the R&D trap, device makers must start not with new and complicatedtechnologies, but with a key consumer behavior that needs improving. Having identifiedthe problem, design a product to solve it. Successful design comes in two steps:

1) Pick a behavior that needs improvement.

2) Concentrate on usability elements that make the primary behavior better.

The C5 Method: Choose the Right Behavior To TargetThe first step every product designer should take is to decide on an existing consumerbehavior that needs improving. If the behavior is common and bothersome and a newproduct improves it at a reasonable cost and hassle, success is far more likely. To helpdefine the right qualities for the target behavior, Forrester created the C5 method ofevaluating new device categories -- five criteria to evaluate a new idea. C5 explains whypast products succeeded or failed and predicts new product prospects (see Figure 2). The first two C’s describe behaviors worth targeting. They must be:

1) Common. Successful devices improve a behavior users do often -- or elseconsumers won’t care. VCRs took off because they made it easy to watch movies, a common TV behavior. By contrast, the :CueCat struggles to gain an audience;few consumers need Web bookmarks while reading magazine articles. Focusing on a common behavior refines product design decisions (see the September 1999Forrester Report “The New Consumer Electronics”).5

2) Cumbersome to do. It is no use improving on a behavior that already works well.The PC took off because it made the task of editing a typewritten letter easier viaword processing software. Internet appliances like the Intel Dot.Station, on theother had, took the relativity easy task of surfing the Web and made it morecomplicated -- the user had to learn new keys and browser functions not on thePC. Cumbersome tasks like organizing music or making phone calls on the roadare well worth targeting.

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Figure 2 C5 Method Identifies Why Past Products Succeeded Or Failed8




CommentsDevice Com

mon

Cum

bers

ome

Cont

ent

Cost

-effe

ctiv

e

Conn

ecte

d

Behavior

VCR Great match of all C5s once pricedropped and video stores arrivedWatch/record

movies

DVD Low price and rental content storyas with VCRWatch high-

quality movies

Home theater DVD content will drive sales up

Listen to high-quality cinema

sound

Walkman Small form factor and personal content made it a huge successMusic on

the go

CD player Less cumbersome than turntable, andonce content was in stores it took offListen to high-quality music

ConsumerPC

Trickle down from enterprise worked to solidify consumer behaviors

Wordprocessing

Game console

Games business is about hit titles --content drive consolesGaming

Cell phone Talk on the go: huge benefitCalls onthe go

Minidisc Cheap, but insufficient step up from solid-state MP3 playersRecordmusic

PVR Hard to hook up now, will win as itis integrated with set-topsManage

TV content

HDTV High cost and awkward setup - -special TV and set-top requiredWatch high-

quality TV

:CueCat No content and just as cumbersomeas typing in a URLBookmark

advertising

Internetappliance

Web access not cumbersome enoughto need improving

BrowseInternet

Laserdisc Not enough movies or quality difference to best VCRWatchmovies

Polaroid Succeeded until cheap disposable cameras reduced relative valueInstant

photographs

Web TV More cumbersome than using PC;no clear need for Web on TVBrowse

Internet on TV

eBook Cost is not commensurate with cheappaperbacksPortablereading

Newton Form factor and handwriting recognition made it clunky to use

Make personalinformation

portable

Behavior Solution

More Less

The last three C’s explain the how the solution matches up to the problem; it must be:

3) Cost-effective. Digital cameras’ initial thrust in the market centered aroundtrying to show how users could save money doing their own photo printing athome. But with $10 disposable cameras and $5 1-hour film developing, it was hard to justify spending $700 for a digital camera and ink-jet printer. Digital cameravendors succeeded only when they redefined the benefit of sharing pictures viaemail -- and when the cost came down.

4) Connected to other devices. Devices don’t operate in a vacuum. A new productis more likely to sell if takes advantage of existing devices that the user already has.CD players took off because they made consumers’ existing home stereo systemssound even better. HDTV, by contrast, has been slow to succeed since existingcable boxes, TVs, and VCRs aren’t compatible with it.

5) Content-ready. Devices have a head start if they can access prepackaged or user-created content. By connecting to any TV signal, PVRs like TiVo have a wealth ofmedia to offer the user. But titles for eBook readers are hard to find with only fewhundred titles on offer -- even “Harry Potter” is still not available.

Forrester’s Device Review Measures How Well Products Serve User Behaviors If a device passes the C5 test, will it succeed? Maybe. It all depends on implementation.Successful devices feature usability upfront and make the primary behavior a dream to use.Products that can excel at both usability and utility, like the Sony Walkman, lead to satisfiedcustomers who in turn evangelize the product to others. To measure usability, Forrestercreated the Forrester Device Review, evaluating products in scenarios designed to mimicactual usage. Top-rated products shine in six categories designed to match the device’sexperience with user behaviors (see Figure 3):

• Valuable functionality. Above all, a product must deliver a clearly defined valueproposition at a fair price. A $150 DVD player like the Pioneer DVD-341 scoreshigh: The price matches the benefit, product function is obvious, and Pioneeraddresses a behavior pattern simply and elegantly.

• Design for intended purpose. Devices succeed when form matches function.The Apple iMac’s total integration of computer, monitor, and modem made itideally suited for the most common PC usage pattern of going online.

• Clear communication. When a user needs help, devices must guide the userthrough the process. For example, Windows XP features step-by-step, plain-Englishinstructions to help users print digital photos online. Clear communication feels justright; its absence creates user frustration.

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Figure 3 Device Review Criteria Measure Usability 10




Valuable functionality

Design for intended purpose

Clear communication

Responsive and reliable

Integrated

Innovative and appealing

1. Does the primary function of the device fill a clear user need?2. Is it obvious to the user what the device does?3. Can the user access the device’s primary function quickly and easily?4. Is the price point of the device reasonable?

5. Does the device’s form factor suit common usage patterns?6. Are the functions of device controls clear and easy to recognize?7. Does the device require peripherals to fulfill user goals?8. Is the fit and finish of high quality?9. Is output of high quality?

10. Can the user tell how to initiate working toward a goal?11. Does the device provide feedback to the user regarding its operation to help the user

accomplish a goal?12. Is easy access to help or indicators integrated into the device?13. Does the manufacturer avoid jargon and technical language when presenting

information to the user?14. Is it easy for the user to change device settings and preferences?

15. Is the initial device setup quick and simple?16. Is the device immediately usable from the moment it is turned on? 17. Does the user have to wait more than 1 second for the device to perform any function?18. Is the device reliable?19. Does the device allow users to recover from their errors gracefully?

20. Does the device connect well to other devices?21. Does the device add value to other devices and content?22. Is the device experience integrated?

23. Does the device‘s use of technology aid the user in reaching a goal?24. Will the device’s form factor differentiate it from similar products?25. Do the device’s specifications limit its current market potential or future growth?

Devices are given a starting score of 50. The highest possible score is 100, the lowest possible score is 0, and a score of 75 or higher should be considered an overall passing grade.

Scoring 2: strong pass, 1: pass, -1: fail, -2: strong fail

• Responsive and reliable. Products that work continuously and protect users frommaking mistakes can sell millions of units. The rugged construction of Nokia’spopular 6160 cell phone was able to to stand up to heavy on-the-go use -- everyphone call in public became an advertisement for the product.

• Integrated. Consumers are more likely to use a device that can maximize otherresources. The TiVo PVR can connect and instantly add value to virtually anyexisting television setup; built into a satellite box, it’s even easier to use. Once used,integrated products are hard to give up.

• Innovative and appealing. Great products must innovate to stand out, even as theyappeal to a large audience. For example, the Sony Walkman sported innovativedesign in its portable form factor, and its ease-of-use made it appeal to an audiencebeyond just those on the go.

MATURE CATEGORIES REQUIRE BETTER DEVICE DESIGNAs PC and CE makers move to create new product categories, how do their products rate?To find out, we evaluated four categories -- PDAs, MP3 players, digital cameras, anddigital media terminals -- for C5 suitability (see Figure 4). We also reviewed 12 separatedevices (see Figure 5). Mature products with strong C5 potential, like PDAs, scoredhigher than newer categories like MP3s and digital media stations. The reason? Themore mature products focus better on an appropriate user behavior. As the devicereviews revealed:

• PDAs’ market maturity creates a need to innovate. With four years on themarket, PDAs score high on device reviews. The highly-rated Sony CLIÉ andHandspring Visor Prism reflect how well PDAs organize personal information (see the December 31, 2001 Forrester Brief “Device Review: PDAs Must InnovateTo Stand Out”).6 The CLIÉ differentiated itself with a better screen and musicsupport, extending the value of the PDA while enhancing core functions. Inmature categories, these innovations distinguish sales leaders from also-rans.

• MP3s won’t take off until prices drop and the user experience improves.The first MP3 players relied heavily on their cool factor to make up for poorlydesigned user interfaces. Even now, users must wrestle with complicated softwareto enhance the music experience (see the December 31, 2001 Forrester Brief“Device Review: MP3s Must Improve Usability”).7 The Apple iPod scored high byeasing this burden, but high price and Macintosh-only focus keep will keep it frombreaking into the mainstream (see the November 13, 2001 Forrester Brief “iPod:Sounds Great But Won’t Change The Tune”).8 A successful product here wouldmimic Apple’s tight software and hardware integration on a PC.

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Figure 4 PDA Market Maturity Shows In Strong Across-The-Board C5 Scores

• Digital cameras get bogged down in the software. Digital cameras are amature category with a clear user goal of taking pictures, but some scored low by complicating the image transfer process (see the December 31, 2001 ForresterBrief “Device Review: Digital Cameras Need PC Integration”).9 The HP camerabeat out established photo giants Eastman Kodak and Canon by acing bothcamera design and simple software to move and email photos. Future digitalcameras will win based on how well they integrate with PCs -- picture quality is now a commodity.

• Media terminals proudly display their complexity. The least-developedcategory, digital media terminals, scored the lowest. These devices took simpleactivities and made them cumbersome (see the December 31, 2001 Forrester Brief“Device Review: Media Terminals Are Mute For Now”).10 Neither the HP nor theZapMedia would automatically play a CD, even if the user inserted a disc andpressed the play button. Media terminals will languish until a simple, universallyobvious user interface makes one worth the trouble.

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CommentsDevice Com

mon

Cum

bers

ome

Cont

ent

Cost

-effe

ctiv

e

Conn

ecte

d

Behavior

PDA User already has personal data, value inorganization and portability

MP3 Focus on task of organizing music, whichis still an emerging activityListen to

digital music

Digitalcamera

Taking pictures today not that difficult,will solve problem of sharing

Take/sharepictures

Mediaterminal

Expensive compared with CD player, but can be connected to stereo and PC

Listen to largemusic library

Behavior Solution

Personalinformation

management

More Less

Figure 5 High-Scoring Products Focused On Integration And User Behaviors 13




HP de100c 10 14 9 13 6 9 61

HP Photosmart

71512 13 15 14 11 8 73

Valu

able

func

tiona

lity

Desig

n fo

r

inte

nded

purp

ose

Clea

rco

mm

unica

tion

Resp

onsiv

e

and

relia

ble

Inte

grat

ed

Inno

vativ

e

and

appe

alin

g

ScoreDevice

Averagedigital camera

Averagemedia terminal

Canon PowerShot

S4012 15 13 11 6 9 66

Kodak EasyShare

DX3900 Zoom14 9 9 17 5 4 58

ZapMedia ZapStation 9 13 11 14 7 5 59

16 20 20 20 12 12

AverageMP3 player 11.3 13.8 11.8 12.8 9.0 8.8 67.3

AveragePDA 14.3 14.7 16.7 14.0 7.7 8.0 75.3

16.7 12.3 12.3 14.0 7.3 7.0 65.7

9.5 13.5 10.0 13.5 6.5 7.0 60.0

AverageCE manufacturer 12.0 13.6 12.7 12.9 7.7 7.0 65.9

AveragePC manufacturer 12.2 13.6 13.0 14.4 8.0 9.0 70.2

Dig

ital

med

iate

rmin

als

Dig

ital

cam

eras

Apple iPod 12 16 14 15 11 11 79

CreativeNOMAD

Jukebox 20GB11 16 16 5 11 8 67

SonyMZ-R900DPC 11 12 9 15 7 8 62

RioVoltSP250 11 11 8 16 7 8 61

MP

3p

laye

rs

Sony CLIÉPEG-N760C 13 17 19 12 12 10 83

HandspringVisorPrism

16 14 19 14 5 9 77

CasioCASSIOPEIA

BE-30014 13 12 16 6 5 66

PD

As

Maximum 100

PC INTEGRATION SKILLS BEAT CE’S OVERLY SIMPLE OFFERINGSHow do the PC industry and CE industry stack up against each other on targeting 5Cbehaviors with highly usable products? Despite CE’s strong design skills and simplicity,it is the PC industry’s ability to put together a seamless experience when connecting toother devices that creates the advantage. Focusing on this advantage can vault PC makerspast their enterprise PC heritage. As users look to extend behaviors learned from otherproducts like PCs and CD players, integration and behavior-focused design will createwinners. For the near future, we see PC players having the upper hand. Why?

• PC vendors make integration innovative. PC vendors dominated CE in everycategory we tested, even innovation. Why? Because innovation emerges from aproduct’s ability to leverage existing products and technologies. For example, theApple iPod didn’t use the FireWire connection just for fast data transfer but alsofor charging the battery. Since the user behavior that these new products targetemanates from existing devices, this advantage pervades PC maker offerings.

• CE makers’ simplicity push backfires. The main reason why CE products like theKodak digital camera and the Casio PDA scored poorly is that in CE manufacturers’effort to make things simple, they actually exposed a large part of the technology tothe user. Products like Creative’s NOMAD Jukebox took hours to set up, and whileit kept the number of buttons low, the user interface required the user to learnmultiple functions for the same button.

• CE makers leave the user to fend for themselves. To succeed, CE companiesmust focus on integration. The main reason the HP camera beat CE rivals Kodakand Canon had less to do with image quality and more to do with its ability to walkthe user through the common task of emailing photos. CE devices like SONICblue’sRio Volt and Casio’s CASSIOPEIA Pocket Manager did not come with any specialsoftware, leaving up to the user to figure out how to use the product. CE vendorswould do well to follow Sony CLIÉ’s example; not only did it include basic softwarefor activities like organizing personal information, but it also provided extrasoftware to enable entertainment.

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A C T I O NThe final piece of the new category puzzle is to execute well at marketing and retail.The right strategy is to focus once again on the primary user behavior and how thedevice improves it. To succeed:

Market the user’s value proposition, not the device’s. If a device maker has gone to the trouble of creating and perfecting user-focusedproducts, its marketing should follow suit. TiVo’s original ads focused on pausinglive TV or vague benefits of not being under the networks’ control. Success is nowin reach as TiVo highlights user benefits like recording and watching shows,rather than harping on device features.

Don’t let price points destroy the value statement. Device makers should not let price points trump servicing user behaviors. TheKodak DX3900 Zoom is a perfect example -- at $399, this product clearly meetsthe needs of retailers to sell a hot camera for less than $400. But for an extra $80,the device can remedy a poor user-connectivity experience by including theEasyShare Camera Dock. By either automatically including the dock or makingthe upgrade a simple task, Kodak could avoid costly support calls or productreturns.

Use existing areas of the store to create context.Trying to invent behaviors that have yet to develop results in large marketingspending for marginal market effect. For example, Sony is spending millionserecting special Memory Stick sections in retail stores like Circuit City. Theseareas demonstrate how well Memory Stick devices integrate -- but deviceintegration is not a basic user need. Sony should erect Memory Stick ministationsin each store section -- PDAs, MP3s, and digital cameras -- showing how to usethe technology for that particular product category. As users add new devices,they would see new Memory Stick areas in context and begin to understand thevalue of swappable storage.

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The Secret To Device SuccessA C T I O N

W H A T I T M E A N S

Microsoft will learn to thrive on other operating systems.CE players afraid of having Microsoft control the user experience on new deviceswill use a variety of operating software like Linux, Palm, Java, and Wind River.After trying fruitlessly to push Windows CE, we think Microsoft will settle forbecoming the main supplier of tools for the device developer community. Theresult: manufacturers get OS freedom and robust development tools and consumersget a more integrated environment.

Home gateways become family planners.As households get more and more connected gadgets, connections among familymembers will depend on how well devices can interoperate. With gadgets as variedas handheld game consoles, kitchen Internet terminals, and Web tablets, it isunlikely that a single standard like Bluetooth or UPnP will get devices talkingdirectly. Home gateways for interactivity and entertainment will step in to becomethe intermediary data collection device (see the September 2001 Forrester Report“Broken Home Gateways”).11 So when Junior downloads his school choir schedule,it will flow into the family calendar so others can sync up to be alerted to whatnight the big concert is on.

Aging baby boomers redefine what is cumbersome.As baby boomers reach their 50s and 60s, their fading eyesight and manualdexterity will challenge device makers to produce gadgets that are more senior-friendly. RIM pagers will come with an enlarged-keyboard attachment andremote controls will feature large touchscreen buttons. Speech recognitioncompanies like SpeechWorks will see their business blossom as virtually alldevice designers look to provide voice-enabled upgrades to their product lines.

Integration firms become acquisition bait for CE firms.Players like Philips and Samsung looking to fast-track their integration capabilitieswill find the best results with wireless integration players like AvantGo andInfoSpace. When partnering with them for PDA applications, they will pressthese players to think beyond the handheld space to see how to improve interdeviceapplication communication on a variety of platforms like set-top boxes andmedia terminals. Integration shops that demonstrate skills in making solutionswork on multiple devices and platforms will get gobbled up by device leaderslike Sony and Panasonic.

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The Secret To Device SuccessW H A T I T M E A N S

R E L A T E D M A T E R I A L

Online Resources

Four device-specific briefs focusing on PDAs, MP3 players, digital cameras, and digitalmedia terminals are available online in the PDF of this report.

Companies Interviewed For This Report

Related Research

December 31, 2001 Forrester Brief “Device Review: Digital Cameras Need PC Integration”December 31, 2001 Forrester Brief “Device Review: Media Terminals Are Mute For Now”December 31, 2001 Forrester Brief “Device Review: MP3s Must Improve Usability”December 31, 2001 Forrester Brief “Device Review: PDAs Must Innovate To Stand Out”July 2001 Forrester Data Overview “Devices & Access North America: ConsumerTechnographics Data Overview”September 1999 Forrester Report “The New Consumer Electronics”

Apple Computer www.apple.comAdaptec www.adaptec.comAmerica Online www.aol.comBest Buy www.bestbuy.comCanonwww.canon.comCasio www.casio.comCircuit Citywww.circuitcity.comCompaq Computerwww.compaq.comCreative Technologywww.creative.comEastman Kodakwww.kodak.com

Evolve Software www.evolve.comHandspring www.handspring.comHewlett-Packard www.hp.comInFocus www.infocus.comIntel www.intel.comLogitech www.logitech.comMicrosoft www.microsoft.comPalm www.palm.comProdigy Communications www.prodigy.comSamsung www.samsung.com

Sharp Electronicswww.sharpelectronics.comSONICblue www.sonicblue.comSony www.sony.comTiVo www.tivo.comTweeter www.tweeter.comUniversal Electronics www.uei.comVialta www.vialta.comZapMedia www.zapmedia.com

17


The Secret To Device SuccessR E L A T E D M A T E R I A L

G R A P E V I N E

Devices can even make ad content.Recently TiVo partnered with Lexus; a button on its main menu led to a sweepstakes,directing users to watch a car ad. After watching the ad, the user would then answer aquestion about it and be entered into a drawing for a new Lexus. TiVo made it easy forusers to find the spots by giving them a list of shows in which the ads would air. We likethis approach better than ReplayTV 4000, which can eliminate commercials completely.Advertisers should seek out relationships like this with device companies, turning thePVR from an enemy into an ally (see the November 2001 Forrester Report “CultivateConsumers With ITV Ads”).12

……

eBooks could be the ultimate remote.When Gemstar-TV Guide purchased eBook reader vendors Softbook and NuvoMedia,it should have converted their tablet-sized devices into TV Guide-enabled remote controls.Imagine a TV viewing companion that displayed upcoming show details, catch-up plotsummaries, interviews with celebrities, movie reviews, personalized recommendations,and one-click PVR scheduling. Instead, Gemstar is flogging the orphan devices in unsoldbanner-ad slots on its TV Guide Interactive IPG pages. Gemstar should know betterthan to think reading digital novels would outsell a product that enhances TV watching.

……

Device review awards: What were they thinking?Annoying quirks in some devices we reviewed reminded us that these gadgets might notbe PCs, but they still can have the same bugs. Our awards for the most unusual: For MostButtons And Indicators, the prize goes to the Sony MiniDisc Walkman, with a grandtotal of 59. For Most Cryptic Dialog Box, the Apple iTunes 2 software wins with thisgem: “Enabling iPod for FireWire disk use requires manually unmounting iPod beforeeach disk connect, even when automatically updating music.” And Worst Crash RecoveryMethod goes to Creative’s NOMAD Jukebox; after one nasty crash, we had to removethe batteries and start over. New digital devices are not nearly as rock solid as traditionalCE products. The lesson: Makers should take extra care to ensure proper user andquality assurance testing before going to market.

18


The Secret To Device SuccessG R A P E V I N E

E N D N O T E S1 For the purposes of “The Secret To Device Success,” we classify companies based on their main

product and brand heritage. For example, CE makers like Toshiba make laptop PCs, but they areorganized and act much like a traditional consumer electronics company. We view new entrants likeSONICblue and Creative as CE companies because their product lines lean toward a CE-focus.

2 Forrester divided up early adopters into five clusters of device ownership. Those in the PC-focusedcluster had high penetration of devices like PDAs and laser printers. The entertainment-focusedconsumers had MP3 players and interactive TV.

3 In the future, consumers expect home networks to incorporate more entertainment sharing acrosschannels, like home stereos playing music downloaded from a PC.

4 Two different groups of North American consumers -- heavy PC users and entertainment gadgetowners -- trust similar brands.

5 A new class of more capable consumer products will better satisfy consumer desires by focusing ona basic consumer behavior, using two or more supporting features to better accomplish that goal.Vendors will need to implement new strategies to design, market, and support these devices.

6 PDAs are a mature category with high usability. To thrive in this market, PDA makers must createbetter integration with desktop software, as the Sony CLIÉ does.

7 The MP3 category excels in innovation and integration. Apple iPod shows the right features -- PC-based MP3 makers should try to mimic its ease-of-use.

8 Apple’s new portable iPod MP3 player is the best on the market; but it does not extend or simplifythe digital music listening experience. While a niche product, it will goose vendors like Rio toimprove the music download and organizing experience.

9 Lack of innovation and poor design make digital cameras hard to use. HP’s simple PC connection,for users who want to share digital pictures, points the way for the future.

10 Initial media terminal efforts will fail to bring digital music into the living room. While less flexiblethan PCs, they are too complex to work well with other audio components.

11 The dream of a universal broadband home gateway is flawed. The diversity of applications that will run on PC and entertainment devices will not allow for a single controlling device to emerge.PC gateways will grow to 29 million homes by 2006, and entertainment gateways will developseparately and reach only half as many households.

12 New technologies like PVRs and electronic program guides will erode the impact of typical TVadvertising. Marketers need interactive TV’s new ad avails, interactivity, and targeting to harvestconsumer relationships.

19


The Secret To Device SuccessE N D N O T E S

By Bruce Kasrel

With Josh Bernoff

Jason Sorley

Headquarters: Forrester Research, Inc., 400 Technology Square, Cambridge, MA 02139 USA +1 617/613-6000 Fax: +1 617/613-5000

Amsterdam • Austin • Chicago • Frankfurt • London • San Francisco • Tokyo • Toronto

www.forrester.com Email: [email protected]

DECEMBER 31, 2001

Device Review: PDAs Must Innovate To Stand Out

PDAs are a mature category with high usability. To thrive in this

market, PDA makers must create better integration with desktop

software, as the Sony CLIÉ does.

We performed device reviews on three PDAs (see the December 2001 Forrester Report“The Secret To Device Success”). We found that Handspring’s Visor Prism and Casio’sCASSIOPEIA BE-300 Pocket Manager cost less but haven’t perfected usability. Bycontrast, Sony’s CLIÉ succeeds by adding entertainment and an integrated desktopexperience to its core functions.

• The Sony CLIÉ PEG-N706C provides an elegant all-in-one solution.Scoring an 83 out of 100, the Sony CLIÉ blew away the competition in design and integration. The CLIÉ is heavier than competing devices, but its extra weightadds usability with a 320x320-pixel high-resolution color display and MP3 playback(see Figure 1).

• The Prism is workmanlike and expandable, but weaker on integration.Handspring’s Visor Prism, which scored a 77, offers users plenty of flexibility;users can add Springboard Modules for applications like digital photography and cellular telephony. While it is among the least-expensive PDA solutions, its desktop software is limited to standard Palm features (see Figure 2).

• CASSIOPEIA puts consumer needs second. The BE-300 Pocket Manager ledthe pack in reliability but scored only a 66 out of 100. Its proprietary operatingsystem requires users to double tap the display, which is cumbersome. And userswithout Microsoft Outlook will find that they can’t sync their desktop with theirPDA (see Figure 3).

Figure 1 Forrester Device Review: Sony CLIÉ PEG-N760C

DECEMBER 31, 2001 2

©2001, Forrester Research, Inc. Reproduction prohibited.


Total 83

All PDAs

830 25 50 75 100

Average75

High83

Low66

13 out of 16Valuable functionality

Negatives• US$500 retail price exceeds its competitors

Positives• Includes a variety of user software, like Vindigo

and AvantGo, on install CD• Focuses on user entertainment like MP3

playback, not just PIM

17 out of 20Design for intended purpose

Negatives• Protective front cover falls off during shock tests

Positives• 320x320-pixel display supports high-resolution

images• Except for cover, very well-constructed and

durable

19 out of 20Clear communication

Negatives• Jargon like “aCiW” in some applications is

hard to understand

Positives• Frequently used tasks are always available• Scroll wheel makes navigation simpler• Feedback is always present and helpful

12 out of 20Responsive and reliable

Negatives• Requires 4-hour charge time• In some cases device forgets information

when user hits “back” button• Some tasks take more than 5 seconds to run

Positives• Startup time is less than 1 second

12 out of 12Integrated

Negatives• None

Positives• Connects to other devices on first attempt• Some applications, like mapping software on

install CD, have integrated special features (e.g., customized CLIÉ Web page)

10 out of 12Innovative and appealing

Negatives• Does not connect to Macintosh

Positives• Design and entertainment focus differentiate

CLIÉ from competition• Makes viewing digital photos on PDA easy

Figure 2 Forrester Device Review: Handspring Visor Prism

DECEMBER 31, 2001 3


Total 77

All PDAs

770 25 50 75 50

75

High83

Low66

Figure 2 Forrester Device Review: Handspring Visor Prism


Negatives• None

Positives• Pressing primary action buttons turns on

device and brings user to that action• Retails for US$299, US$100 less than its

competitors


Negatives• Color display performs poorly in sunlight

Positives• Provides solid workmanlike durability• No peripherals required for general use


Negatives• No indicator for time remaining in beaming

content

Positives• Device operation is obvious• Feedback is continuous and helps users

accomplish goals


Negatives• Requires 2-hour charge time• Crash brings user to preferences, not main

menu

Positives• Most functions, including startup, execute in

less than 1 second• Software setup is quick


Negatives• Sometimes failed to beam applications larger

than 50K on first try• Standard Palm software not customized for

Visor

Positives• None


Negatives• 160x160-pixel color display providess lower

resolution than PDAs like the CLIÉ

Positives• Springboard Modules make Visor

expandable to fulfill other user goals

DECEMBER 31, 2001 4

©2001, Forrester Research, Inc. All rights reserved. Forrester, Forrester eResearch, Technographics, and TechRankings are trademarks ofForrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy orslide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information,go to www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.

14078


Total 66

All PDAs

660 25 50 75 100

Average75

High83

Low66


Negatives• Application buttons do not turn on device

Positives• Retails for US$200, far less than its competitors• 16 MB of storage sufficient for storing MP3s

and digital photos


Negatives• Operating system requires users to double tap

with the stylus for some functions• Menu button uses confusing icon• Flimsy protective cover frequently falls off

Positives• 320x240-pixel color screen provides good

display for digital photos


Negatives• Web browsing is not possible without upgrade;

lack of feedback does not make this clear• Technical language in connections menus

(e.g., “LAN address”) is confusing

Positives• Frequently used tasks, such as primary function

icons on the display screen, are always available• Help is present for some applications


Negatives• Requires 2-hour charge time• Some tasks take longer than 5 seconds

to execute

Positives• Takes less than 5 seconds to start up• Did not crash• Retains information during user errors


Negatives• Does not connect to Macintosh• Few options for additional software; Casio site

is limited

Positives• Connects to PC on first try


Negatives• Is larger and thicker than its competitors• Works only with MS Outlook

Positives• None

Figure 3 Forrester Device Review: Casio CASSIOPEIA BE-300

By Bruce Kasrel

With Josh Bernoff

Jason Sorley




DECEMBER 31, 2001

Device Review: MP3s Must Improve Usability

The MP3 category excels in innovation and integration. Apple’s

iPod shows the right features -- PC-based MP3 makers should try

to mimic its ease-of-use.

We performed device reviews for four MP3 players (see the December 2001 ForresterReport “The Secret To Device Success”). MP3 players are still too diverse for consumersto compare them easily. The RioVolt SP250 and the Sony MZ-R900DPC, for example,focus on extending consumers’ familiarity with media like CDs and minidiscs to the MP3market, while Creative’s NOMAD Jukebox 20GB and Apple’s iPod add flexibility to thestraight MP3 format. While these products are all flawed, they point the way to success --makers should copy Apple’s integration and better design, but on the PC platform.

• iPod scores high, but excludes the mass market. Scoring 79 out of 100, the iPodexcels among MP3 players. Its excellent software integration and compact size beatother storage-based MP3 devices. The problem: iPod only connects to FireWire-enabled Macintoshes and requires Apple’s iTunes 2 music software. At US$399,iPod retails at a price point above other MP3 players that offer 20% more storagefor 33% less (see Figure 1).

• NOMAD’s MP3 suffers from a cumbersome user interface. Creative’sNOMAD, which scored a 67 in our device review, has 20 GB of storage on aninternal hard drive -- enough for users to carry their entire music collection. TheNOMAD Jukebox integrates well with its Creative PlayCenter 2 music software.The fatal flaw: its onboard interface, which makes creating playlists and organizingmusic painfully difficult (see Figure 2).

• Sony’s MZ-R900DPC MiniDisc player makes users work too hard. Sonysimply adds a Digital PCLink Converter to its existing recordable MiniDiscplayer; the resulting device scores only a 62. While users can record 5 hours of music onto the minidisc media, the device doesn’t walk the user through thetransfer process. Add slow recording times, and the Sony MiniDisc shows toomany weaknesses to succeed (see Figure 3).

DECEMBER 31, 2001 2

• The RioVolt, while cheap and responsive, is rigid. Scoring 61 out of 100, the Volt provides consumers with low-cost entry into the MP3 market. But usersneed to burn music onto MP3-formatted CDs to use it. Requiring CDs removesmuch of the flexibility that makes digital music so enticing. We doubt the Volt will reach a substantial audience once prices on high-end MP3 players come down(see Figure 4).


Figure 1 Forrester Device Review: Apple iPod

DECEMBER 31, 2001 3



Total 79

All MP3s

790 25 50 75 100

Average67

High79

Low61


Negatives• US$399 retail exceeds competitors that have

20% more storage

Positives• Fast transfer of music• Serves as portable hard drive


Negatives• No carrying case• No playback when charging on a Mac

Positives• Light and small• More than 10 hours of battery life• One-handed operation• Excellent construction


Negatives• Cannot change volume when out of play mode• No feedback on startup volume• Artists listed incorrectly in some cases

Positives• Menu uses clear, nontechnical language• Basic settings are easy to change• Convenient color indicator for play mode


Negatives• Doesn‘t tell user to delete software after install• Forgets information when turned off• Wait time is 3 to 4 seconds for a song to play

Positives• Comes with iTunes 2 software on device• Starts in less than 1 second• No crashes


Negatives• No software alert when charging completed

Positives• Connects to iMac on first try every time• Can share music with other devices• Flawless integration with iTunes 2 software


Negatives• iPod only connects with Macs• Hard drive and battery cannot be replaced

Positives• Clean appearance differentiates iPod• Software is upgradable• Technology is invisible to user

Figure 2 Forrester Device Review: Creative NOMAD Jukebox 20GB

DECEMBER 31, 2001 4



Total 67

All MP3s

670 25 50 75 100

Average67

High79

Low61







Negatives• Music playback requires navigating confusing

queue list

Negatives• Not obvious how to play music• No indicator for battery level in main display• Jargon like EAX is confusing to users

Negatives• Bulky design make active use difficult• Headphones awkward for some users

Negatives• Requires eight rechargable batteries• Takes 20 seconds to start up• Device forgets information if user hits “clear”

button by accident

Negatives• Creating playlists without PlayCenter2 software

is difficult

Negatives• Bulkier than competitors

Positives• 20 GB of storage• US$350 retail price consistent with competition

Positives• The controls are clearly recognizable• Requires no peripherals for general use• Construction is solid• EAX sound settings provide great flexibility

Positives• Feedback on EAX sound settings is excellent• Long list of device settings to choose from• Indicators are easy to find

Positives• Scrolling options execute in less than 1 second

Positives• Connects well with PC and Mac• Included PlayCenter2 software integrates

experience• Can connect to home theater systems

Positives• Firmware upgradable• Supports new formats

Figure 3 Forrester Device Review: Sony MZ-R900DPC

DECEMBER 31, 2001 5



Total 62

All MP3s

620 25 50 75 100

Average67

High79

Low61







Negatives• Requires users to carry minidisc media• US$350 retail price exceeds competition

Negatives• Device has no indicator for available space

remaining on minidisc media• No clear on/off button• No play button on remote

Negatives• Excessive controls: 59 buttons and indicators

on device and remote• Minidisc media not included

Negatives• Song selection takes 5 seconds to execute

Negatives• No integration with software• Cannot improve speed of recording

Negatives• Minidisc media not currently a popular

format in the US

Positives• Can press Play to start, even when the device

is off

Positives• Small and portable• Good protection from skipping• Solid, durable construction

Positives• User can enter song titles easily

Positives• Can use device immediately• Display functions execute in less than 1 second • No crashes

Positives• Included Digital PCLink rips music from

computers and digital home amplifiers

Positives• Can record digital signals through optical

and USB

DECEMBER 31, 2001 6


14077


Total 61

All MP3s

610 25 50 75 100

Average67

High79

Low61







Negatives• Only plays CDs• At US$180, costs more than competing

TDK Mojo

Negatives• Has no visible on/off button• Settings language for modes is confusing• No indicator to tell how much longer device

needs charging

Negatives• Menu navigation difficult• Flimsy plastic construction on device and

headset remote

Negatives• 7-hour charge time for batteries• Takes 8 to 10 seconds to start up

Negatives• Included software offers no special features

for integration with Volt• Does not come with connection cables for

car or home audio

Negatives• Similar in design to other portable CD players

Positives• Can press Play for playback, even when device

is turned off• Excellent bookmarking of audio CDs

Positives• Equalizer customizes output• Comes with software for both PC and Mac• Comes with leather case and strap

Positives• Indicators for most functions are available and

easy to access

Positives• Can be used while device is charging• Default mode allows users to re-establish

factory settings

Positives• Plays MP3-formatted CDs and prerecorded CDs

Positives• Upgradable to formats beyond MP3

Figure 4 Forrester Device Review: RioVolt SP250

By Bruce Kasrel

With Josh Bernoff

Jason Sorley




DECEMBER 31, 2001

Device Review: Digital Cameras Need PC Integration

Lack of innovation and poor design make digital cameras difficult

to use. HP’s simple PC connection, for users who want to share

digital pictures, points the way for the future.

We performed device reviews for three digital cameras (see the December 2001 ForresterReport “The Secret To Device Success”). Even with years of experience in the cameraspace, CE manufacturers Kodak and Canon have yet to perfect a digital solution. HP’sPhotosmart 715 did the best job of easing the transfer of digital images.

• HP’s Photosmart 715 leads the way with ease-of-use. The Photosmart 715,which scored a 73 out of 100, bests CE manufacturers by providing photo softwarethat eases sharing digital pictures. The camera can be used with one hand, and theuser interface gives helpful feedback while taking pictures (see Figure 1).

• Despite good design, Canon’s PowerShot S40 has connection problems.Scoring a 66, the Canon PowerShot S40 is among the smallest for its purpose, andits elegant metal finish makes the camera feel substantial. But Canon’s PowerShotsuffers from a longer setup than the other cameras, and its software crashes withWindows 98 (see Figure 2).

• Kodak EasyShare’s poor integration impairs the user experience. Coming inlast with a score of 58, Kodak’s US$399 EasyShare DX3900 Zoom may still connectwith buyers who want inexpensive digital photography. But Kodak’s poor integrationwith photo software makes sharing photos complicated, and users will find its buttonsand indicators hard to figure out (see Figure 3).

Figure 1 Forrester Device Review: HP Photosmart 715

DECEMBER 31, 2001 2



Total 73

All digital cameras

730 25 50 75 100

Average66

High73

Low58


Negatives• US$499 retail price exceeds its competitors

Positives• Needs just one click to take picture• Nonmodal interface is easy to use


Negatives• Colors wash out when using Flash• Plastic case is not well-constructed

Positives• Operates with one hand• Requires no expensive peripherals for

picture taking


Negatives• Camera provides little feedback for secondary

uses like sharing pictures• Cannot change photographic elements like

aperture

Positives• Camera provides good feedback for primary

task (picture taking)• Required several attempts to figure out how to

take pictures


Negatives• Frequently used tasks like reviewing pictures

and selecting menus take more than 1 second

Positives• Device is ready to use in less than 5 seconds• Encountered no errors or crashes• Tolerated button miscues and user errors


Negatives• None

Positives• Connects to PC on first attempt• Included software helps users easily achieve

goals like sharing pictures• Seamlessly transfers pictures from camera to PC


Negatives• Frame is bulkier than competing cameras

Positives• CompactFlash cards and USB connection

appeal to a wide market• Works with Macintosh and PCs

Figure 2 Forrester Device Review: Canon PowerShot S40

DECEMBER 31, 2001 3



Total 66

All digital cameras

660 25 50 75 100

Average66

High73

Low58


Negatives• Camera is slightly more expensive than its

competitors

Positives• Offers one-button picture taking in all modes


Negatives• Operations like adjusting exposure are not

clearly indicated• One-handed operation is not possible;

functions are spread out over device

Positives• Buttons for basic functions clearly marked• Is well-constructed and durable• Requires no expensive peripherals

for general use


Negatives• Picture playback on camera is not intuitive• LCD screen offers poor visual feedback

Positives• Provides audible feedback for nearly every

camera operation• User can change all settings, including user

interface


Negatives• Some functions, like moving between pictures,

take longer than 1 second to execute• Photo software crashed frequently with

Windows 98

Positives• Easy 3-minute out-of-box setup• Startup takes 2 seconds


Negatives• Does not connect well to computer; complex

USB set up

Positives• Ships with software and hardware to display

digital pictures on PC and TV


Negatives• 4 megapixel is a growing technology but not

widely used in today’s market

Positives• Compact design differentiates camera from

its competitors

DECEMBER 31, 2001 4


14076


Total 58

All digital cameras

580 25 50 75 100

Average66

High73

Low58


Negatives• Needs two or three clicks to take a picture

Positives• Camera retails for US$399, much less than the

competition


Negatives• Awkwardly placed on/off button• Requires two hands to operate• Complicated user interface• Plastic case feels flimsy

Positives• Requires no proprietary peripherals for picture

taking or transfer to a PC


Negatives• Not immediately obvious how to turn on• Audible feedback used only for picture taking• Help features do not guide users toward goals

Positives• Can manipulate camera settings using the

menu system


Negatives• On-camera picture manipulation takes more

than 1 second

Positives• Camera setup takes less than 1 minute• Camera starts in less than 2 seconds• No errors or malfunctions found


Negatives• Input for connecting camera to TV is hidden• Photo software typically shows pictures at

lower resolutions• Photo software doesn’t assist user in download

Positives• Delivers high-quality pictures to TV and PC


Negatives• Picture-transfer capabilities are inferior to

competitors’ • Varies little in form factor

Positives• Camera appeals to broad market

Figure 3 Forrester Device Review: Kodak EasyShare DX3900 Zoom

By Bruce Kasrel

With Josh Bernoff

Jason Sorley




DECEMBER 31, 2001

Device Review: Media Terminals Are Mute For Now

Initial digital media terminal efforts will fail to bring digital music

into the living room. Media terminals are less flexible than PCs

and too complex to work well with other audio components.

We performed device reviews for two media terminals (see the December 2001 ForresterReport “The Secret To Device Success”). These broadband-connected devices help userstake a large digital music collection, organize it, and play it back on a home entertainmentsystem. Both the HP Digital Entertainment Center (hp de100c) and ZapMedia ZapStationfeature large hard drives and MP3 encoding and playback. The HP de100c focuses onaudio, letting users burn their own CDs, while the ZapStation adds Internet videostreaming and DVD playback. While media terminals improve the sound of MP3 files,the user cost is too great -- the terminals’ clumsy interfaces and confusing setups willkeep this category from catching on any time soon.

• HP’s simple approach won’t overcome category problems. Scoring only a 61 outof 100, the HP de100c was difficult to use, and its modal interface complicatedsimple tasks like playing or ripping a CD. While simple, the interface lacked corefunctions like quick searching, a necessity on a device that stores 10,000 songs. AtUS$1,000, this product will only appeal to affluent, high-end audiophiles who arewilling to take the time to rip hundreds of CDs (see Figure 1).

• The ZapStation’s lack of focus will stunt growth. The ZapStation, whichscored 59, suffers from a split personality. Is it a video player or an audio jukebox --or is it about Web surfing? This schizophrenia interferes with the interface --nothing works smoothly. Retailers won’t know where to put the device in the store,and consumers won’t know what it’s good for. Top that with a US$1,500 price tagand this product will have a hard time even reaching a small niche (see Figure 2).

Figure 1 Forrester Device Review: HP de100c

DECEMBER 31, 2001 2



Total 61

All media terminals

610 25 50 75 100

Average60

High61

Low59







Negatives• To play music, user must always navigate menus• US$1,000 price tag appeals only to high-end

audiophiles

Negatives• Confusing interface: User cannot add items

to a playlist in the Playlist section• Help system is not context-sensitive• Terms like “My Favorites” are not well-defined

Negatives• Needs Internet access to work, but it doesn’t

come with default account

Negatives• Onscreen keyboard is clunky to use• Bug required a reboot before playing CD

Negatives• No listing of which devices it supports• Internet radio took more than 5 seconds to load

Negatives• Lack of search makes managing large music

library difficult

Positives• Automatically creates genre listings as

new types of music are added• 40 GB hard drive can store more than 800 CDs

Positives• User can encode at 256 Kbps for full audio

quality• Two digital audio outputs

Positives• Bottom status bar usually tells the user the

purpose of each menu item

Positives• If device is unplugged while recording, it

recovers recording when plugged back in• Fast encoder

Positives• Ships with all cables needed to connect

to stereo

Positives• LCD display makes using device without

TV easy

DECEMBER 31, 2001 3


14079


Total 59

All media terminals

590 25 50 75 100

Average60

High61

Low59







Negatives• US$1,500 price tag is US$500 more than the

competition

Negatives• Buttons are confusing: The GoTo button

actually goes to the Start screen• No feedback when a button is pressed• No scroll arrows in text blocks

Negatives• Design requires user to have home

network with broadband

Negatives• Confusing setup requires user to call

broadband provider to get information• No CD track memory

Negatives• Complicated process to connect to PC involves

getting IP address and running ActiveX applet• Does not inform the user of limited device

support

Negatives• Encoder rips CDs slowly• Need for home network and high-speed

access makes it a niche product

Positives• User can quickly understand main function• One-click play for last song listened to

Positives• Very well-constructed• Remote and wireless keyboard• Excellent sound quality via two optical audio

outputs

Positives• Help system is complete and context-sensitive• Dialog boxes confirm major operations

Positives• Device boots instantly • Reads DVDs quickly and plays them right away• Quickly gets track listings for CD from the

Internet

Positives• Uses Internet connectivity to create songs

and artist listings automatically• Interface allows for software upgrade

Positives• Front USB ports extend the music experience to

other devices

Figure 2 Forrester Device Review: ZapMedia ZapStation

Documents

The Secret To Device Success · MARKET OVERVIEW Device Makers Pursue New Category Success Both PC and consumer electronics (CE) makers expect to win in creating new digital product