cnet: “The question naturally arises – in a world filled with $229 iPod Touches and $349 Netbooks, is there room for a $300 product that is essentially a hybrid of the two? The touch screen is an important feature for a portable device to have, but the lack of a HDD or software other than a Web browser makes this essentially a thin client that surfs the Web and does little else (and without a mobile broadband option, it can only do that when in range of an accessible Wi-Fi signal). – Then again, small devices like this are made or broken based on their ease of use and design (see: iPhone versus Blackberry Storm), so if Arrington and his partners somehow manage to nail the user interface and physical package, they could have a very desirable product on their hands. “

Arrington: “Its a prototype. not reality. just pretty case with cool computer and some slick software. 4 of them. not ready yet.”

Arrington: “The key uses: Internet consumption. The virtual keyboard will make data entry a pain other than for entering credentials, quick searches and maybe light emails. This machine isn’t for data entry. But it is for reading emails and the news, watching videos on Hulu, YouTube, etc., listening to streaming music on MySpace Music and imeem, and doing video chat via tokbox. … Price? it can be built for less than $250, including packaging. Add in fixed costs and other stuff you have to deal with (like returns), and you can sell it for $300 and probably not go out of business. Physical design is important, and the software is the key to winning. – We stumbled through an initial prototype that barely booted, but we finished it in a month. Prototype B was much more impressive and usable. That effort was led by Louis Monier, with software developed by Singapore-based Fusion Garage and industrial design work by by David Yarnell and Greg Lalier from Dynacept. … Ok, so now that what’s done is done, where do things stand? Well, I’m not ready to say yet. But one thing I’ve learned about hardware in the last year is that you need partners to actually make things happen, and the credit for what we saw today goes entirely to the Fusion Garage team. Those guys are rock stars.”