Intel and Microsoft unveiled the UMPC last month. The device features an adapted version of Windows, a 30GB-60GB hard drive and 7in screen. Battery life is estimated to be around 2.5 hours for the early models due out later this year.
The UMPC's success depends in part on the emergence of high speed wireless technologies that offer users access to their data at all times.
Vendors also need to create comprehensive subscription bundles that offer wireless connectivity and access to premium content such as streaming music and video, argued Jim McGregor, a principal analyst at In-Stat.
"We need to really look at the hardware but also at the services model. The biggest constraining factor is consolidating this and bringing down its price level and complexity," he told vnunet.com.
If these issues are not resolved, the device will appeal mostly to niche markets by 2011 and unit shipments will be limited to 3.8 million, according to McGregor.
The analyst expects sales to ramp up next year, and for device makers to sell between 100,000 and 210,000 units in 2007.
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