The First Computer Revolution of the 21st Century

Change comes hard to people. It takes courage, dedication and intelligence to be different. Leaders change things. Most people do what everyone else does. Most people do not ask "why?" With change comes confusion. Sometimes confusion itself brings change, but most big changes come incrementally. Opportunity can also occur. It is a good thing to be ready when opportunity comes calling.

Microsoft and the hundreds of companies worldwide that make computers and applications that work with Windows have generated more opportunity through the Internet in a given period of time than arguably any other human creation. The telephone or television and the car or airplane, each introduced change, which led to other developments, but none has introduced as much potential for a massive shift in communication, education and commerce as the Internet. Incidentally, communication, education and commerce are the three most important ingredients that lead to change.

The Internet has introduced a new sort of freedom. Naturally, freedom can inspire both "good" and "bad". This is human nature and no rule or technology alone will change this. We have email; we have spam. We have file sharing; we have piracy. The question becomes: is the freedom to do what you want still freedom when it violates the freedom of some one else? If we talk about the future of the Internet we have to start there and this is where responsibility steps in. Freedom and responsibility work together. Said another way (by someone much smarter): vigilance is the price of liberty. Have we forgotten why homes have doors, or why doors have locks?

Surely, this is the study of Governments, but the Internet transcends government because it can theoretically involve all humanity. How to get so many, so different to agree in union to a code of behavior? Well, it could start here ­ with the Pegasos and MorphOS. There are machines in 34 countries. The first building blocks are in place.

We have to be different if we want to create change. We have to be more than a computer, an OS and applications. We have to be about change. At the same time, we have to be about the same things people have always done; we just have to do them in better ways ­ more conveniently, easier, faster. The car took us places faster. The airplane further and faster still. We can stay right where we are with the television and "be there". And, the telephone, well there is nothing new there ­ people talking to people. Now, people talk to each other with the convenience of not "being there" and from wherever they are.

So, where are we going with all this?!?!? :-D

Where we are. It is our feeling that change begins one person at a time. So each of you reading this can be part of the change. We have some plans for the near and mid-term future and a vision for what comes after, but we cannot do it all by ourselves. We are looking to create big changes and we need lots of people ready to propel and promote this change, but just before you think we are asking for charity, keep reading.

With the introduction of the Pegasos II we will be launching a number of old ideas in new ways. For example, the Pegasos II will come with MorphOS and the ever evolving and improving SuperBundle. We will not charge for the operating system and we will do everything we can to insure that the SuperBundle remains free to Pegasos owners. This means that we will favor an application that we can offer for free as part of the Pegasos. We want to extend this possibility as far as we can, not just for the "lite" version of an application, but for the fullest and latest release too. That goes for other operating systems as well. We think there has to be enormous "value" in what can be done with the Pegasos. The latest improvements for applications or operating systems must be available to all Pegasos owners. For MorphOS, we want to create an open-source mentality and support system for a closed-source operating system. For the Pegasos, we will offer a EULA-free hardware platform, again drawing innovation to the other object of our commercial interest, the hardware itself. The difference is that Genesi wants everyone who contributes to the success of the Pegasos and/or MorphOS to participate in the success as well.

Step #1: Make it a business

Genesi is not a profitable commercial operation. But, we are looking for like-minded people who want to share the risk and opportunity to turn it into one. The foundation has been laid. We have spent a considerable amount of money and effort just getting to the point where we can now transition it all into a business ­ the first venture phase is almost over. We have gathered a core team. We will continue to recruit others. We have licensed a host of applications and core operating system components to get the package to a point of minimal credibility. Today, we have accomplished this much and we now find ourselves on the threshold of opportunity.

Step #2: Carpe Diem

The Pegasos has been initially targeted at the computer "geek" market. Computer software developers, embedded system technicians and suave computer users that enjoy developing unique computing solutions define this market. In the next marketing phase, we intend to leverage the worldwide interest in the Linux, as HP, IBM and Sun, to further draw attention to the Pegasos. Linux is available for the Pegasos platform from a growing number of distributions, giving the Pegasos owner several choices from which to choose. There is a move away from Microsoft based products, particularly in Europe, where a number of governments have mandated that Linux or another fully featured possibility replace Windows for official computer use. On the Pegasos, MorphOS will be present and exposed to users through the notoriety of Linux. MorphOS will remain our sublime focus. We will ride the Linux wave to bring MorphOS to solid ground.

Simultaneously, there are a number of other very strong trends in the IT market that will positively contribute to a successful broader market introduction of the Pegasos II including: 1) market saturation, where the reasons to upgrade are beginning to sound increasingly empty ­ why upgrade if you cannot notice the difference, and 2) the growing emphasis on mobility which remains dominated by power consumption and efficiency (i.e., heat) issues as they relate to cost and use.

Genesi's business plan is based on continuing to seed the "geek" market with a flexible, forward compatible and scalable technology, while progressively targeting the markets that are driving the penetration of the PowerPC into the broader consumer market. For example, the worldwide state-of-the-art in the satellite television technology is a set-top box based on the PowerPC. The Nintendo GameCube and the TiVo are both consumer products based on a PowerPC. These are consumer electronic products <b>and</b> computers that are restricted to specific functions to reduce cost. It is Genesi's position that when these market forces are coupled with the upheaval triggered by Linux in the computer industry, the PowerPC is poised to become a commodity component at a much lower cost that will soon challenge the dominance of Intel-based processors because they are more efficient and powerful cycle for cycle. The Pegasos and MorphOS are well positioned to take advantage of the changes anticipated.

Recently, a large European media company commissioned Genesi to develop a low cost PowerPC based digital terrestrial television set-top box based on the Pegasos platform and MorphOS. In turn, Genesi developed a new kind of device that achieves both consumer electronic television related requirements and computer industry performance standards. On the low-end the device manages digital television viewing with expanded interactive features using instructions embedded in the digital television signal that can modify the information stored in the memory of the device. On the high-end given the addition of a broadband Internet connection, the device combines all the features of a computer and the Internet with all the possibilities created by the huge amount of data that can be transmitted by the digital television signal, whether terrestrially or by satellite. The features available can be scaled as a function of cost and performance from Euro 69/unit to Euro 299/unit. At Euro 299/unit the device is a fully functional computer that can be used as a home server to find and play music or movies (irrelevant of the source), operate with a web cam as a videophone, or supplemented with WIFI features to feed multiple devices in the home.

As the core technology of the Pegasos/MorphOS is more efficient and powerful the total system cost requirements for components, memory, and power can be reduced. <i>More can be done with less and for less</I> ­ that sounds like the old C64 marketing slogan;-). Genesi owns MorphOS and develops and modifies it internally. There are no royalties to be paid to third parties, further reducing the cost of use when compared to other available systems. Certainly, once the Pegasos is fully refined the hardware itself can be reduced to a handheld device, which corresponds to the evolution IBM has fashioned for the PPC. MorphOS is ideally suited for this environment and the future we envision. We can and will create a VERY competitive offering.

Step #3: Make it better; make it the best

Good, better, best. These are comparative terms. They are measures of relative value. To be better than anything else, we have to be the best! How? All the established players have more money and more resources. To be better, we have to change the rules. To draw an analogue from science, think about the electron orbital levels in atoms. As the Periodic Table number increases, the number of electrons and sophistication of electron orbitals found increases. We need to bump things up to the next "orbital". To be better, we have to change the definition of the "best". We have to add another "level". We have to be "next".

Here are a few general areas where you will see our focus. All these issues will be addressed at the right point and be integrated by design step by step into our future product offerings.

1. Security and Privacy issues will be balanced along with a number of existing tools to create a safer computing/internet experience. As the citizen of a country you have certain rights and responsibilities. Think about what is required to vote in an election or obtain a passport. Why should the Internet-based Community be any different?

2. A digital distribution and an online micropayment system needs become a function of the platform itself. Piracy won't end with music. Movies are destined to be "napsterized" next. The system is broken. We need to find a solution. Smart cards will have a role here.

3. Communication, information and entertainment are the keys to success. We want a built in videophone, online mass multiplayer game environments, and easier ways to use the Internet.

In fact, we want something completely better than what exists. We do not need to re-build it, we just need to leverage what is mostly there already and improve it. We have to be inexpensive and we have to provide "value". The platform needs to become invisible to the experience. When you are write a letter, have a conversation, watch a movie or play a game -- the computer is helping you to do something. What you are doing should be the focus, not the computer. The computer is a means to an end. The objective: make the user's life better. Make doing anything that can be done with a computer easier to do from anywhere, anytime.

Want to be part of it? We will be offering a way for anyone who has the skills that we need to accomplish these steps the opportunity to earn shares of Genesi stock during the next phase of our corporate development. We will be focused on making as many of you that deserve and want to be shareholders just that. Of course, all the Genesi employees/contractors will have the opportunity to be shareholders. There are plenty of millionaires working for Microsoft thanks to the same concept. We will even extend this opportunity to the Community. In this way we will create the incentive for increasingly broader and more fully committed long-term support. If there are applications that work on MorphOS, we want them integrated into the platform and we want the revisions and improvements coming as quickly as possible. There are websites that can be developed and maintained to promote the platform in one way or another. There are Moderators and online Help Teams that will be needed. We want all to have a chance to earn a stake in the success. We will have plenty of needs and there will be plenty of opportunity.

We understand that this kind of incentive is not for everyone and we respect this. We also respect the fact that without the support and involvement of the Community we would not have the success we are having today or the success we are destined to have in the future. This is our way of acknowledging our appreciation for all the benefit a vibrant, intelligent and participative Community can bring. Please consider this: it is not about creating a great game or an application that will bring a developers success. It is about many developers doing many things and all benefiting from the work of each other that will bring the greatest success. It is the total package. And remember, to be the best it will take much more than "developers". We subscribe to the Phoenix Developer Consortium definition here. There will be many things for many different kinds of people to do!

If you are interested in leading the charge to change and to getting the revolution started with your own contribution, please let us know. We will be happy to hear from all interested parties.

That¹s enough for now. Have a great day!

Raquel & Bill
bbrv@genesi.lu