Velocity Micro Enters Mainstream E-Reader, Tablet Markets

To expand its reach to more mainstream consumers, Velocity Micro is entering the e-book and tablet markets with devices scheduled to ship next month. According to Josh Covington, marketing manager, there’s a limited market for the $3,000 desktop computers that the company is known for. “We're still selling a lot of them, but realistically, there aren’t a ton of people out there willing to spend that kind of money,” he said. “As we continue to expand our brand, we're trying to look at more products that will appeal to a mainstream audience."

The $199 7-inch Android-based Cruz Reader is in pre-order at Borders.com, NewEgg.com and CruzReader.com and will be available next month nationwide through Best Buy and others. Its $299 tablet PC cousin ships at the end of September at those retailers, and others to be announced, Covington said. The e-reader and tablet aren’t Velocity Micro’s first stab at a high-volume category. The company recently pulled the plug on a $329 netbook “because the market was declining so much,” Covington said. He said the company hasn’t decided how long to give the e-reader and tablet to succeed. “We're testing the waters right now. It’s definitely going to be a focus for us for the next couple of years.” How many years isn’t clear. “It’s so hard to predict the PC market that far in advance,” he said.

Asked why the market needs another e-reader, Covington highlighted the product’s color screen and video playback. “Ours isn’t just a black-and-white reader like the others out there,” he said. “It’s essentially a tablet that also does reading. It’s a convergence device.” Covington pointed to the product’s ability to play back MPEG-4 and H.263 and H.264 video content along with music. “We wanted to make a unique product, so it combines the success of the iPad with the success of the Kindle,” he said. The company is treading a fine line between the categories. The Cruz Reader could be considered a tablet, with built-in Wi-Fi, multimedia playback, color touchscreen, web browsing capability and expandable storage through USB and SD, Covington said. But “the tablet moniker is tricky,” he said. “Calling it a reader has more appeal to more people."

Velocity Micro will market the Cruz Tablet to enthusiasts in September. The two products share features including reader capability for EPub, text, PDF and HTML files, built-in Wi-Fi and 7-inch touchscreen. The tablet packs more power, RAM and storage, Covington said, and it plays additional media files, including AVI and WMA. A third product in the line is the Cruz StoryPad, a $149 tablet with proprietary software specifically for kids, Covington said. The Linux-based reader is customizable for story books and moving story books, and it plays back games and movies, he said. The StoryPad will be sold through education channels, not generic retailers such as Borders, he said.

High-end gaming product remains the company’s bread and butter, despite the shift downstream, Covington said. “Those customers “made us who we are today,” he said. “We're not turning away from it at all.”