A few years ago, a scrappy startup called Slim Devices started selling the SLIMP3, a very hacker-friendly home MP3 player. The thing's basically an audio dumb terminal with a fluorescent display and remote control sensor, which streams audio from a perl server running somewhere on your ethernet. I got the impression that they started the company because no one else was making the device that they wanted. The server component is open source, so naturally, it runs on every platform known to man--even, in a nice bit of synergy, the sadly-discontinued Martian NetDrive wireless storage module. It supports iTunes and WinAmp smoothly out of the box, comes with a wide range of user-contributed skins for the web interface, and even lets you play tetris on the device's display. Thanks largely to the goodness of the smart server, dumb hardware combo, Slim Devices has done well enough to roll out the Squeezebox, which adds most of the things that the SLIMP3 was missing, like wi-fi, digital out, a headphone jack, and an actual case.
Enter Roku Labs. They started out with an HDTV slideshow viewer which clearly hasn't attracted as many customers as they'd hoped--it debuted for $500, and now sells for $300. Recently, they unveiled their second product, the Soundbridge, very slick-looking thin audio player. As far as I can tell, the basic model matches the Squeezebox feature-for-feature (except the headphone jack), and raises the stakes with a nice case, bitmapped display, and hardware decoding for more formats. The list price is exactly the same, though they also sell a gargantuan version for those who want $250 more fluorescent display area. The interesting bit appears when you scroll to the bottom of the Soundbridge product page--the product is unabashedly based on SlimServer.
Even though Slim Devices is clearly peeved, Roku appears to be playing by the rules, claiming that they'll contribute their enhancements to SlimServer when the Soundbridge comes out. Slim Devices appears to be on the losing end of this deal--Roku can benefit from the community efforts on SlimServer as much as Slim can, while focusing their efforts on besting Slim's hardware value-add. Assuming Roku doesn't drop the ball on this one (the Soundbridge is still vaporware), Slim either has to improve their product line or get out of the business.
Did Slim do the right thing in making their server open source? It certainly improved their product more quickly than they could've done it by themselves, and the hackability definitely appealed to the early adopters who were the obvious market for the SLIMP3. So on the one hand, the open server brought them this far--but it also helped the competition leapfrog them. Sure, the customer wins, but it sucks to be Slim right now.
So, when does it make sense to build your business on top of an open source project?
(Incidentally, I just picked up one of the refurbished SLIMP3 units that Slim is selling at a decent price--it's definitely a handy piece of kit, even if it's not as smooth as the newer devices.)
Posted by Joe Hughes at April 7, 2004 09:27 PM | TrackBack