$499: the price of a blogger-techies feud

Mike Arrington - Founder of TechCrunchWhat do you get when you cross a leading blogger, a technology idea and a copyright dispute? Unfortunately the answer is a product so overpriced as to be pointless.

Last year, Michael Arrington (pictured) of TechCrunch (a major blog which has its content republished to the Washington Post) began work on an idea he had for a new product: a Linux-based tablet computer designed primarily for web surfing which would retail at around $200.

The aim would be to fill a supposed gap in the market between a smartphone and a fully-featured netbook for people who wanted a simple way to get online other than their main computer. There’s no knowing exactly how big that gap is, but Arrington’s high profile would have ensured publicity not only through his site and the Post, but from other tech reporters curious about how somebody from outside the tech industry would perform in launching a product.

Arrington partnered with manufacturers Fusion Garage to produce the machine, to be named CrunchPad, and all seemed to be going well. At one point Popular Mechanic magazine declared it one of the most brilliant products of 2009, a decision that in hindsight looks embarrassingly premature.

The two sides had planned to launch the product in November, but Arrington claims that just three days before the scheduled event, Fusion Garage contacted him to say they were going to release it without his involvement. He also says they offered to give him a role as head of marketing of the device in return for getting the rights to use the CrunchPad brand.

Arrington rejected this offer and insisted that neither side owned the intellectual property outright and thus unless the two sides released it as partners, the device would never be unveiled. He noted that “it’s legally impossible for them to simply build and sell the device without our agreement.”

As you can imagine, lawyer have already become involved. But in a press conference this week, Fusion Garage claimed the two sides never had any form of contract and that it held the rights to everything in the project except for the CrunchPad name. It then announced that it will indeed be releasing the machine, this Friday, now using the name JooJoo.

That’s a little surprising given the inevitable legal wranglings. But what’s really surprising is the cost.

As noted, Arrington’s original target was $200, a price Fusion Garage says was never practical. Reports as the project went on suggested $400 was more realistic, while when announcing the split, Arrington said the production cost would be around $300 and he believed sponsorship could keep the retail price as close to this as possible.

The JooJoo, however, will retail for $499.

That may be a price that “fairly” reflects the production costs. It may be a price that allows a healthy profit margin. It may even be price that makes enough cash to pay off the lawyers.

But $499 as a retail price for a portable internet browser? You have to be kidding.

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