• by Aaron Baar , July 6, 2010

Only two years old, consumer electronics company Isabella Products has just begun to target consumers with its first Internet-connected device, Vizit, a digital picture frame that updates automatically via AT&T's cellular network. Last month, the product received a boost when the New York Times called it out as one of "Three Upgrades for Late Adopters," citing its ease of use and connectivity. 

But Isabella founder and CEO Matthew Growney says the Vizit is just the first of several so-called Mobile Internet Devices (MIDs) that are intended to fill the gap between home computers and cell phones. In a phone interview, Growney talked about the company's first product, how it plans to avoid being pigeonholed around that product and the entire MID sector.

Q: The frame is awfully easy to use. Why didn't anyone think of this before?

A: People have. It's a combination of a lot of stuff that a little company can control and a big company is unwilling to let go of. It's still certainly very early. We're very happy so far with the customer reaction. You plug it in, and that's pretty much it.

Q: What marketing have you done to reach consumers?

A: Our specific marketing story, if you will, for this product is family communications. So there's a lot we do with moms and the mom-blog crowd, the mom publishing crowd and the home media crowd. In the back half of this year, we're going to work more with our partners in a much tighter fashion for distribution and co-marketing, like AT&T, Photobucket, TimeLife. The product placement will be exploited a lot more by the larger footprint by an AT&T.com or the AT&T experience store.

Q: How important are these partnerships with a relatively new company and a relatively new product? I don't suppose you have a lot of capital to spend on an ad campaign.

A: They're very important to us with respect to being a valuable thought leader to them. We've found it very easy because we've presented a very compelling opportunity for them, which is to allow them to monetize what perhaps may have been previously categorized as mobile content. We certainly can't afford to spend a million a quarter in direct advertising, so we're able to do co-branding and be the hardware solution -- the physical interface -- for many of these providers like Photobucket. They love that kind of marriage so far.

Q: This is a third device for consumers. They've got the computers and the phone. Is this a new area for them?

A: The MID device space, that's Isabella's story. We're not a photo frame company, we're an MID company. Over the next three to five years, the world anticipates 500 million to 1 billion new devices added to the cellular networks that are not phones and are not netbooks. They are previously unconnected devices. In order to be a successful MID company in the future, you're going to have to create not just the device experience, but also the service experience. That's where a lot of traditional consumer electronics companies are going to have problems connecting their unconnected devices, because they don't understand the service aspect of it.

Q: How do you avoid being defined by your first product?

A: Our second product is really going to look at selling a tablet. I think that's very different than what a photo frame is. Having additional products in the portfolio that, again, has a different but equally compelling value proposition will have a portfolio effect. It won't be a deviated step-sister to Vizit. I don't think people will be wondering why the makers of Vizit will be putting out a tablet.

Q: Who do you see as your competitors both for Vizit and all Isabella products?

A: For Vizit, when you talk about the purely photo frames, there's two thoughts. There's one, those who don't care about being connected. They're going for beautiful pictures. They're beautiful, but they're $900, and they go for that in their marketing spiel. Then there's the other thought, the Chumby [or] Dash, Internet channel reader and browser. We like to be in the middle, which is where we're going to introduce innovation, but we're going to introduce innovation for the subscriber base which is multi-generational, parents of parents, gift-giving. One side is technology savvy; the other is not.

Q: What do you do for the future for reaching consumers and walking that line? You're still limited in people sending pictures to their grandparents.

A: Previous to today, the photo frame business was still an 80-20 gift marketplace, where 80% were bought as gifts. So far in our subscriber base, 57% bought them for gifts and 43% bought them for themselves. We're starting to see that this isn't just going to be for the grandma. The device experience tends to be a more unique one, and when you add new content with news and weather, and everything being hyper-local because it's cellular, then it becomes a bit of a different experience.

Q: What do you see as the future for these MID devices then?

A: We're not going to carry more phones, so the only way for operators to make more money is on a variety of new types of devices at a variety of price points. But the services and the interface of the hardware experience are going to be what wins. It's not just going to be on content of stuff and it's not going to be on the lowest price point.