March 28, 2001

Alas, poor Audrey

Back in November, we reported with some optimism on 3Com's introduction of Audrey, a kitchen-oriented Internet appliance (see "Market magnet"). We suggested that Audrey's mix of family-organizing features, plus its ability to work with any Internet service, might just attract the adoration of the masses.

Oh well. Last week, 3Com announced that it is euthanizing the colorful touchscreen device. In the wake of this news, I'm encountering the inevitable sky-is-falling articles, in which various Chicken Littles proclaim that Audrey's failure indicates a total lack of consumer interest in Internet appliances. Invariably, these articles also recount the woeful tale of the i-Opener, whose resounding failure sent its creator, Netpliance, scurrying off in search of a new business model. In essence, these doomsayers are declaring the whole Internet-appliance concept DOA.

But let's remove the twitchy fingers from the panic buttons for just a second. As Maury Wright, CommVerge's editor-in-chief, has argued (see "Subsidynesia"), the i-Opener's failure probably had more to do with the fact that Netpliance tried to lock consumers into a lengthy ISP contract than with any flaw in the underlying concept. Similarly, you can't reasonably argue that Audrey's end has much to do with the product's capabilities (or lack thereof). A couple-month stint on the store shelves hardly constitutes conclusive evidence of a bankrupt concept.

In fact, economic reality and stockholder sentiment drove 3Com's decision. Simultaneous with sounding Audrey's death-knell, 3Com reported losses of $122.8 million for 2000's fiscal third quarter and announced some substantial layoffs. Given such conditions and the fact that it hadn't yet proven to be a revenue generator, Audrey was a sitting duck.

Now, I'm not here to eulogize Audrey in particular. In retrospect, the product may have been too complex for computer-phobic Joe, yet too simple for early-adopter Jane. In addition, the $499 price tag probably didn't sit well with either of them. Since the device didn't really get a fair shot at the market, we'll never really know.

But do you seriously doubt that people will eventually want Internet access away from the shackles of a PC? I don't. Someday, perhaps when broadband connections become more pervasive, someone will hit upon a winning Internet-appliance formula. More likely, many people will hit upon a whole range of winning formulas.

For now, let's just remember that one or two failures do not a flawed concept make.

By the way, 3Com also announced that it is ending its involvement with the Kerbango Internet Radio. RCA/Thomson, which had planned to build and market the device (3Com was to run the Internet-based tuning service), was caught off guard by the move, according to a spokesman. The spokesman couldn't confirm whether RCA will go ahead with the product, but stressed that his company still believes in the viability of Internet radio in general. Here's hoping that Kerbango gets a better shot at making an impact than Audrey did.

—Matthew Miller, Managing Editor