Unfolding Microsoft's Origami

Buzz about the UMPC concept has been building for weeks, centered first on a enigmatic Web site devoted to the Origami project and then on a related announcement by Intel at its developers' conference in San Francisco this week.

Microsoft is slated to give more details Thursday at the giant CeBit trade show in Hanover, Germany.

With the PC industry maturing, both Microsoft and Intel have struggled recently to develop new markets for their wares -- and new catalysts for their stocks. While WinTel (a term denoting the close alliance between the two companies) competitors Apple(AAPL Quote) and Advanced Micro Devices (AMD Quote) have seen their stocks soar in recent years amid resurgences in their respective businesses, share prices at Intel and Microsoft have basically been in a rut since the dot-com bubble burst five years ago.

Who Will Buy?

Despite the hype, the UMPC likely won't lift them out of that rut anytime soon, analysts say. Price, they add, is perhaps the biggest initial problem for the UMPC platform.

When Microsoft CEO Bill Gates first started talking about a new class of portable PCs last year, his idea was to have devices on the market for $500 or less.

But the first generation of Origami computers, which will go on the market beginning next month, are set to sell at significantly higher price points, from about $600 to $1,000.

And the lower end of that range may be a bit misleading, in that consumers will have more options at the higher price points than at the lower ones, says Richard Shim, an analyst with the industry research firm IDC.

The UMPC idea is similar to the smart display variation on the tablet PC theme that Microsoft touted a number of years ago, say Shim. The idea then, like now, was to have a relatively simple, portable, personal device.