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The Oqo was novel when the company first debuted: a small, ultra portable PC weighing 1 pound with slide-out QWERTY keyboard. But that was eight years ago.

The San Francisco Chronicle has a little feature Monday on the latest model ("latest" being relative since it actually launched in March of last year), in which it describes how the Oqo is being forced to "defend its niche" against the rise of the mini-notebook from the likes of Asus and Hewlett-Packard. The company cut the price, added Microsoft Vista, and bumped up the storage in September. The Oqo Model 02 is now $1,300.

With the rise of the mini-notebook, the UMPC is essentially toast.

(Credit: Oqo)

The Chronicle also reports the company is doing $20 million in sales these days, after a lot of early hiccups, and boasts some high-profile customers, like Craigslist's Craig Newmark. While that's admirable, it's certainly not going to be enough.

We've reported on the rise of the inexpensive mini-notebook, and consumers are clearly finding them compelling as a secondary machine. Plus, the Oqo--and every other UMPC--has been hobbled from the beginning by high prices and an identity crisis, so Asus, HP, and soon Acer and several others, should have little trouble swooping in to eat Oqo's lunch in a fairly efficient and dispassionate manner.

To be fair, the Oqo is certainly pretty--the screen is bright and clear--but it's not very consumer friendly. It's heavy and with the slide-out keyboard, the form factor is more smartphone than mini-notebook.

But the biggest weakness of the Oqo is the price. Why someone would opt for the Model 02 instead of, say, the Eee PC, or now HP's Mini-Note, confounds me. The Oqo is $1,300. The 7-inch Eee PC from Asus starts at $399 with Windows XP, and though the keys are tiny, functions more like laptop and isn't that much bigger than the Oqo. The Mini-Note from HP comes with Vista starting at $599.

Speaking strictly in terms of technology, what Oqo has done to fit a full PC into such a small package is obviously impressive. But usability and having a distinct usage category are so much more important when looking for mainstream consumer success in the gadget world.