Velocity Micro Enters the E-Tablet Fray

Velocity Micro (VM) has a tradition of flying in the face of high-tech conventions. This small computer maker headquartered in Richmond, Va. — far from Silicon Valley — has focused on producing high-end, customized desktop and notebook computers since opening its doors in 1992.

Its technology terrain is that of which the likes of Dell — and even Apple — fear to tread.  Velocity Micro, which has a headcount under 100, has been unfazed by the daunting challenges of the market. In the process of courting the high end of the market, it has won over hardcore gamers and power users alike — and made money in the process. Now, in what appears to be a radical departure from strategy, the company is making a move to enter what on the surface appears to be a foreign field — the burgeoning electronic tablet frontier currently dominated by Apple. It’s as though Ferrari suddenly announced plans to bring an econobox to market.

But Velocity Micro is bringing its “A” game to the battle. The company believes that tablets will become a 50 million unit market this year. And VM founder and chief executive Randy Copeland has business plans that are far from micro.

“We’re going to try to gain significant market share,” Copeland told BusinessNewsDaily. "We’re mashing the gas as hard as we can. That’s the plan. But we couldn’t do it without this seam in the ecosystem.”

That seam is the gap between the desktop/notebook world and the tiny screened smartphone market. Copeland sees considerable opportunity for computing products that are bigger than a phone but smaller than a notebook.

“I really wanted to focus on portability,” he said. “Something that was almost hand-held. I was looking for a ‘tweener’ product. The iPad is actually what I was thinking about.”

That product concept led VM to produce the Cruz Tablet, an entry-level $299 mobile device with Google’s Android operating system and a 7-inch diagonal capacitive screen somewhat smaller than the iPad’s 9.7-inch screen and $499 entry-level price point. The decision to go with a smaller screen resulted in a product that the company believes provides more flexibility for a variety of mobile uses while still offering high readability. Unlike the iPad, it’s not a stand-alone product, but part of a product line that includes the Cruz Reader at $199. Both were introduced this fall.

Copeland believes that tablets will revolutionize the market.

“I see tablets as a ground shift in how people compute,” he said. “When the software is right and the screen resolution is right, we want to do more sizes,” says Copeland. “We expect to launch six more models in 2011. I don’t think we could do this without Android. I don’t think this is a Windows world.”

The genius of Android, Copeland believes, is that Google put its own graphic user interface (GUI) on top of Linux and gave it the Google imprimatur. Normally, non-techies get the willies when you mention Linux, but the Google glow calms nervous souls.

“It’s the Google brand that people respect,” Copeland said.

While the rest of the computer heavyweights such as Dell and HP were caught off-stride by the introduction — and huge success of the iPad — and subsequently scrambled to play catch-up with their own products, VM acted quickly.

“We don’t have tremendous competition,” he said. “We’re moving faster and quicker. We’ve been able to do it undercover because we’re off the radar. It’s easy to design expensive products. It’s hard getting something into an accessible price point.”

Velocity Micro, which produces tens of thousands of machines each year, may be the last man standing in the dwindling field of independent computer makers. Its main competitors in the high-end realm of super machines were Alienware and Voodoo. Dell gobbled up Alienware in 2006, the same year that HP raided Canada to buy Voodoo.

“We’re probably the last of the holdouts,” said Copeland.

Reach BusinessNewsDaily senior writer Ned Smith at nsmith@techmedianetwork.com. Follow him on Twitter @nedbsmith.