Our partner, Fusion Garage, had inexplicably decided to simply terminate the partnership over “nothing more than greed, jealousy and miscommunication.” A couple of weeks later they launched the device that we had worked on together under a new name, and we filed a lawsuit for Fraud and Deceit, Misappropriation of Business Ideas, Breach of Fiduciary Duty, Unfair Competitition and Violations of the Lanham Act.

Ugly stuff.

Except at the time we really didn’t know how ugly.

Those you you who’ve been following the CrunchPad project since we first announced it in the summer of 2008 weren’t too happy to hear about the recent…hiccups…that we continue to fight through.

But never fear, while we continue to clean up the mess that our Asian contractor left behind we’ve been hard at work on a new project that lets anyone create an iPad like device from any laptop screen. It’s called the CrunchPad Kit and it goes on sale now. Best of all, we’re selling this for just $49 as an introductory price. Once 800 have sold, or about $44,000 in revenue, we’ll be moving to a higher price.

The CrunchPad team has been working around the clock here at our Palo Alto headquarters to get the kit ready for full production in time for the delivery of the iPad on April 3.

We know you want an iPad, but you aren’t as excited about that $499+ price tag. With the CrunchPad Kit, you can turn any laptop screen into a device that’s just as good, for a fraction of the price.

Introducing The CrunchPad Kit

The kit contains everything you need to convert any laptop screen into a fully functional touch screen device. The key piece of technology is a transparent resizable modular touch screen overlap material that you add to the screen after removing it from the rest of the laptop. You then install the remaining electronics, as well as a power supply, and the device is ready to go. Also included in each kit is a 4G module that you can optionally activate and add to the device for always-on connectivity.

There’s real technology here, particularly in the touch module, that we’ve developed with our new partner. A number of patents have been filed around this new research, which we’re calling the F.U.J.J. With the F.U.J.J. you can convert any laptop screen of any size, up to 17 inches, into a CrunchPad.

There’s more information in the video above, including a complete walk through of the five minute installation process. Order your CrunchPad Kit now, we expect to be completely sold out within 48 hours.

Here’s one last picture of the Asian team we hired to help us build this product working on the F.U.J.J. from our office in Palo Alto after we sponsored their immigration visas to get them over here.

There’s already been quite a bit of ink spilled over the demise of the CrunchPad but I thought I’d add a few drops. My opinion is this: the CrunchPad was a testament to the power of online media and a fascinating study in the ability of new media to enact real changes on the real world. While the product faltered, it’s fascinating that the project went as far as it did given the forces arrayed against it.

Think about what happened: if we reduce this to its component parts you have some dudes in California who talked to some dudes in Singapore and who agreed to work together on a piece of hardware. I’ve seen the prototypes and the thing worked and worked well. Most hardware manufacturers can barely take each others meetings let alone coordinate a massive project while separated by a culture and an ocean.

I won’t speak on the problems with Fusion Garage but up until a few hours ago the entire TC/CG team expected to see the CrunchPad at some point in our lives. This is a massive change in this industry. A few years ago a blogger couldn’t get a press pass to CES let alone enough attention to build out a massive and mass-market hardware project.

Other organizations should learn from this or ignore it at their peril. It would behoove the New York Times, for example, to build something like the CrunchPad for consumption of the newspaper. They won’t do it because it is seemingly off-mission. This is what separates new media from old – the acceptance of risk. You can inject that instinct into old media but, as Devin wrote, “old” media can’t make the same mistakes we can.

Trust me: I’m not patting TC on the back here. I had very little to do with the design of this thing and I was as excited – and incredulous – as you were in regards to this product. It was great being part of the organization that began it and it’s sad to see it go.

Michael wanted to make a CrunchPad. It very nearly happened. This marks a sea change in what our media can accomplish as well as a testament to the good will it has engendered in its readership. In the end, a harsh accident intruded. This is an important distinction because from where I sit this clearly wasn’t a case of harsh reality striking down this project but something far stranger.

So goodnight, sweet CrunchPad. Some day your time will come.

TechCrunch editor Michael Arrington recently was interviewed by Charlie Rose for a chat about the latest news and events in technology. Michael gave his take on the Google vs. Microsoft rivalry, saying that each tech giant is going after the other’s core businesses. Michael also touched upon the latest news around the CrunchPad and Apple’s much hyped and potentially similar product, the large form iPod Touch, which is reported to hit the market in early 2010.

Of course, Rose unsurprisingly delved into the whole Twittergate controversy, which Michael gave a lot more insight into, including the discussions with Twitter and the ethical decisions he faced in his decision and why he published the documents. Michael also weighed in on mobile social mapping startup Loopt, the iPhone, the Palm Pre (which he says is a “great phone”) Facebook’s viability as a money-making enterprise and more. Read below for the full transcript of the interview. You can see Arrington’s other Charlie Rose appearances on Crunchbase.

Full Transcript:

Michael Arrington is here. He’s the founder and editor of TechCrunch,
one of the most widely read blogs in Silicon Valley. TechCrunch was
founded in 2005, and now has separate sites covering specific countries and
technologies. Arrington has also formed a company to develop a tablet
computer primarily to use the Web. It is called the Crunchpad. I’m
pleased to have him back on this program. Welcome, sir.

MICHAEL ARRINGTON: Hello, Charlie.

CHARLIE ROSE: Google versus Microsoft. We now have Bing, their
search engine at Microsoft, and Chrome, which is going to be an operating
system, a browser and an operating system.

MICHAEL ARRINGTON: Yes, it’s fascinating, because you think of Google
as a search engine company, which most of the revenue is derived from
search marketing, and Microsoft as a sort of software company. Windows and
Office, that’s where they get a lot of their revenue. And yet these two
companies are competing head on, viciously, because Microsoft wants search
share. There’s so much money in it. So they’ve got Bing and they’re
trying to do things with Yahoo! And Google, I don’t know if they want –
if they want sort of revenue from Office and the operating system, but they
certainly want to take that revenue from Microsoft. So you have them with
Chrome OS and Google Docs competing directly with Windows and Office. And
they’re going at each other’s core businesses, and it’s fascinating to
watch.

CHARLIE ROSE: But do they really look to have great success in that?
Do they expect to take away a lot of Microsoft’s operating system?

MICHAEL ARRINGTON: If you listen to Eric Schmidt at Google, he seems
pretty serious, that they want — they want to do innovative things in the
operating systems space.

I don’t know what their projections are around that, but…

CHARLIE ROSE: There was a story that Eric was the one resisting going
ahead with Chrome as an operating system.

MICHAEL ARRINGTON: Oh, I don’t know if he resisted or not, but he’s
certainly behind it now that it’s public. And they also have Android, of
course, the mobile phone operating system that is also based on Linux.

CHARLIE ROSE: There’s also Bing. So, Bing got very good notices.
People in the business, the Walt Mossbergs of the world.

MICHAEL ARRINGTON: Yes. Bing is a great search engine. They
launched it, what, two months ago now. And it’s a little too early to tell
what kind of market share gains they’ll have, if any, but it’s definitely a
great search engine.

One of the problems with search — and all the guys who do search
testing will tell you this– it doesn’t matter what the results look like
if you have a testing group sort of blind sampling. If you put the Google
logo on top and ask them what they think of the search results, they like
it more than they like it otherwise. And so Google just has the brand in
search, and it’s going to take a lot of time and a lot of money.

CHARLIE ROSE: And a lot of people have to say Bing was better.
Someone said to me this interesting point, that what Google sometimes
worries about if somehow Microsoft computers, PCs, wouldn’t take Google.
Does that make sense to you?

MICHAEL ARRINGTON: I think that Microsoft in the past has made
changes to Internet Explorer that stopped the gathering of information by
the browser — by Web sites. The browser sort of puts up not a firewall,
but you can imagine something like that. I think that’s part of the reason
why Google decided to back Firefox so heavily and also to create their own
browser, to stop that from happening. But I think with Google…

CHARLIE ROSE: So, it wouldn’t be Explorer?

MICHAEL ARRINGTON: Yes. Right. And Explorer’s market share is
dropping.

But I think Google wants to get Microsoft out of the PC entirely. And
they’re offering alternatives across the board to Microsoft software, which
makes that battle so fascinating.

CHARLIE ROSE: Speak to me about mobile phones and mobile technology
and where are we?

MICHAEL ARRINGTON: We’re in an awesome place. I mean, think back. I
know you talk about the iPhone quite a bit. The iPhone changed –
absolutely changed the mobile landscape. And people said, you know, some
people said that Apple couldn’t do this, they won’t do it.

CHARLIE ROSE: Because they began to see it as a computer in itself?

MICHAEL ARRINGTON: Well, yes.

CHARLIE ROSE: That’s what…

MICHAEL ARRINGTON: Although not just that.

CHARLIE ROSE: And it looked good and everybody wanted to have one
because they thought it was so cool.

MICHAEL ARRINGTON: They also figured out Web surfing on a phone with
a small screen that’s a touch screen, but it’s small, but they figured out
the gestures to zoom in and out, and it’s actually an adequate Web surfing
experience that they figured out. No one else had done that before.

CHARLIE ROSE: And what about the Palm Pre?

MICHAEL ARRINGTON: It’s a great phone.

CHARLIE ROSE: It’s a great phone. Why is it a great phone?

MICHAEL ARRINGTON: The operating system I think is as good or in some
cases better than the iPhone. The operating system is quick, you can have
lots of apps open, it’s a great operating system.

The hardware on the phone I think was a little rushed and feels a
little cheap, so for me I’m sticking with the iPhone, but I came close to
choosing the Palm Pre, partially because of the physical keyboard. I think
it’s really nice, and also because I feel like I’m getting a little bit too
tied to Apple.

CHARLIE ROSE: OK. Tell me what Crunchpad is.

MICHAEL ARRINGTON: About a year ago — and I really like where the
industry is going with this — about a year ago, I realized I just want a
big iPhone. I want a computer that I can sit on the couch and surf the Web
without having a weird keyboard stuck to it that doesn’t really work when
you’re not sitting at a desk. And so we started this project on TechCrunch
just talking about it, saying we want to build this and we want help from
the community, and great things happened over the course of a year. We’ve
hired a team. We’ve had lots of people, partners come on board and
contribute their time, their resources, suggest partnerships.

CHARLIE ROSE: Did you go get venture money?

MICHAEL ARRINGTON: Well, you know, I’m not going to answer that
question.

CHARLIE ROSE: Why not?

MICHAEL ARRINGTON: Because I haven’t — I don’t want to answer the
question.

(LAUGHTER)

CHARLIE ROSE: We have our ways, sir.

MICHAEL ARRINGTON: But I’ll say this. I think that Apple — so
there’s rumors — forgetting the Crunchpad and the fact that I want to
build that — Apple is talking about coming out with a tablet computer,
which is going to be a large-screen iPod, or iPhone or iPod Touch. I think
that’s a good thing. I think they’ll sell a lot of them.

Google’s new operating system, Chrome OS, is a Linux-based operating
system with a browser on top, and the idea is you never see the operating
system. You never go to the desktop on the computer. It goes right to the
browser, which is what we’ve been talking about for a year. They’ve been
working on it for a long time. I’m not suggesting we had the idea first.
I have no idea. But the point is, it’s coming to market as a free
operating system. I think that’s really good, and we’re going to see
netbooks without keyboards. We’re going to see computers with other input
mechanisms besides keyboards, or alternative input mechanisms that I think
are going to — really exciting stuff.

CHARLIE ROSE: Facebook versus Google. Is that a big competition?

MICHAEL ARRINGTON: You know, last time we talked, it was Facebook
versus MySpace. And the funny thing is, that’s not the question anyone
asks anymore.

CHARLIE ROSE: It’s what is Facebook becoming?

MICHAEL ARRINGTON: Right. And what is Google becoming. I think it’s
almost like everybody is chasing Twitter right now, and Facebook clearly
is. But when it comes down to it, the social aspect of Facebook, where
your friends are recommending things to you, which could be products or
news items, and it’s the constant sort of logging into the site 25 times a
day is something that Google needs to address. And right now they…

CHARLIE ROSE: So that’s Zuckerberg’s argument. Look, I mean, who
better to go for a search than your friends? If you know and trust.

MICHAEL ARRINGTON: Exactly. Exactly. Yes. Why not?

CHARLIE ROSE: Because they will know who you are and what you like.

MICHAEL ARRINGTON: Some of the startups that buy traffic on Google
search are talking about the conversion rates from those — conversion
rates meaning a purchase or a signup that they get from that purchase
traffic from Google is good, but not nearly as good as the conversion rates
they are seeing from Facebook and Twitter. So if I just send out a link
saying, wow, I just saw this movie and it sure is good, and you click on
that, you’re more likely to go see the movie than you are if you do a
search for it and click on a paid ad from Google.

Google is very aware of that. The free stuff on Twitter and Facebook
is better than the paid ads on Google. And that has to be freaking them
out a little bit.

CHARLIE ROSE: So, what did you do? You published some internal
financial documents from Twitter?

MICHAEL ARRINGTON: There’s this hacker…

CHARLIE ROSE: I know that.

MICHAEL ARRINGTON: This French guy that got these documents from
Twitter because of these guest books (ph)…

CHARLIE ROSE: Right, and so what did you do?

MICHAEL ARRINGTON: I’ll get to it. He — so what he did was, he
wanted to warn Twitter that, you know, your security is awful. And also he
wanted to get credit for doing this as hackers and crackers do. So, he
went to the French media, and a French journalist — he was told about it,
this French journalist went to Twitter and said what happened, Twitter
wouldn’t respond. So he dropped it, came to us and said…

CHARLIE ROSE: Who came to you?

MICHAEL ARRINGTON: This hacker, anonymously, and said, here are all
the documents and sent us all these documents. Started this fascinating
discussion about…

CHARLIE ROSE: What was in the documents?

MICHAEL ARRINGTON: It was hundreds of documents taken from Twitter’s
employees’ attachments to e-mail accounts. And it included interview
schedules, people they interviewed in Silicon Valley, prominent people that
work in other companies that didn’t end up at Twitter. So very
embarrassing stuff. Credit card information for many of the employees. E-
mails, inbox screen shots, executive meeting notes, financial projections,
et cetera, et cetera, et cetera. Just the whole sort of thing. And we
looked at that and said, we’re going to post some of this. Some of it
we’re not. But we said…

CHARLIE ROSE: Like credit card numbers, you’re not going to post
that.

MICHAEL ARRINGTON: We’re not going to post the credit card numbers or
things that would embarrass people, but some of this was — we thought was
pretty darn newsworthy, particularly the financial projections and the
executive meeting notes from the last few months. And so we engaged in a
dialogue with our readers, where we said, look, we have got these
documents. We haven’t decided yet what we’re going to post, we think a
couple of documents. We talked to Twitter, sent them all documents, so
they knew what was going on. Talked to our lawyer…

CHARLIE ROSE: So, what did they say, go ahead and post them?

(LAUGHTER)

MICHAEL ARRINGTON: They said…

CHARLIE ROSE: We have no problem with this?

MICHAEL ARRINGTON: The ultimate answer was, we know you’re going to
post a couple of these, and that’s OK, but for most of these, we’d really
rather you not, and so that’s not a problem, we absolutely won’t. And we
worked with Twitter on the back end to make sure they closed up some of the
security holes that they had. But the interesting thing to me wasn’t the -
– the documents were fascinating. The interesting thing to me was the
discussion that was generated around whether we should publish them or not.

And there are people that have come out, major journalists who have
come out said it was unethical for us to do this. And there were
journalists who had come out and said it was absolutely fine and ethical
for them to do this. In fact, their readers deserve that kind of access.

And obviously I have an opinion because I’m in the middle of the
story, but just taking myself out of it, I think it’s a fascinating
discussion, because I know in the old days, when “The New York Times” or
“The Wall Street Journal” got documents like this, they weren’t — they
didn’t have that discussion with the readers.

CHARLIE ROSE: It’s interesting how you did it, you know, engaging
your community.

MICHAEL ARRINGTON: I engaged them, and I would say that 80 percent of
my readers disagreed with me. And let me know about it.

CHARLIE ROSE: So, why did you do it?

MICHAEL ARRINGTON: Because I think — well, you know, it’s funny.
When I make decisions with TechCrunch on whether to publish or what
position to take, often I’ll look back after everything is played out and
say, would I do things differently with the benefit of hindsight? And
there are a couple of instances in the past where I would have probably
done things differently. In this case, I think I absolutely did the right
thing, and I wouldn’t do things any differently. So.

CHARLIE ROSE: Do you know the site called Loopt? It’s amazing.

MICHAEL ARRINGTON: It’s this mobile social networking. And it’s all
about location.

CHARLIE ROSE: Wherever you are, you know everybody in your block.

MICHAEL ARRINGTON: Yes. I can turn mine on — I mean, I don’t have
my phone with me, but I can turn it on when I get out of here and see
everyone around me who’s a friend. Actually, mine is set up a little
differently, so I’ll see everyone who wants me to see them. And it’s a
different way of networking socially.

I love it. In fact, I’ve written about this, where you can imagine a
time where you walk into a bar and you pull out your phone and you see –
for everyone that wants you to see it, you see — and you laugh and it’s
funny, but it’s also big business. Everyone’s picture who’s the opposite
sex or whatever your sexual preferences are, who is single and maybe wants
to — you can see all of them. And that way you know, you know, you can go
and flirt with them on the phone and it sort of helps you meet people in a
bar.

Or you go into a business cocktail setting, and you see people on your
phone that you’ve met before and maybe it helps you with their first name
or to remember things. I think that’s the kind of thing that Looped (ph)
and others are doing that is going to change social networking.

CHARLIE ROSE: So, tell me how you see the future of social
networking? I mean, is it…

MICHAEL ARRINGTON: I don’t know what it is. I mean, it’s hard to
define. It’s — if you look at Facebook, it’s really the plumbing behind
the interactions online between people and helping them map to the real
world. It’s clear that people love interacting with each other on Web
sites. And it’s clear that Facebook has been able to get third parties to
build applications on their platform that leverage you having your friends
sort of seeing what you’re doing. And it’s clear also that they can then
take that — if you saw what they did with CNN around the elections, and
then you can comment and your friends can see you comment, you know, what’s
going on during the election.

That’s all — it’s sort of really fascinating. What’s unclear is
whether it can really become profitable over the long run. Because
Facebook has these massive expenses, and the revenues are growing rapidly,
but it’s unclear if in the long run, they can make that vastly profitable
like Google has.

CHARLIE ROSE: What about the Kindle space?

MICHAEL ARRINGTON: The ebook reader space is very interesting, and I
wouldn’t expect Apple to stay out of it for much longer, to be honest, but
Amazon has been successful in selling the Kindles. I think they — the
estimates are they might sell a million or so this year. They sell lots of
books on top of it and subscriptions, so it’s a great revenue stream for
them.

I’ve argued that Amazon should not be building a hardware device
specifically. They should be building the software or the device and let
anyone build a Kindle if they want. These are forcing Sony and Barnes &
Noble and Apple and others to come up with their competing sort of closed-
off ebook systems. And so I think that Amazon should really say, look,
we’re going to do the books, we’re going to do the software for the Kindle,
but other people build the hardware.

CHARLIE ROSE: You take care of the hardware. Yes. TechCrunch, thank
you.

MICHAEL ARRINGTON: Thanks very much.

CHARLIE ROSE: Michael Arrington.

Thank you for joining us. See you next time.

Look, we already know a lot about the so-called Apple Tablet. We know the project is real and a lot of man power has been dedicated to the project. A China Times article might have answered a few of our questions though.  That is, if the translated article can be trusted.

The Chinese trade publication is stating that Apple is working on a large screen touchscreen device; we knew that. What we didn’t know was when this device was coming out, but the Chinese supply chain companies are stating October. That’s also when the unibody Macbooks where introduced last year, btw.

The article also states that the screen size would be 9.7-inches. We were thinking it was going to come in around 7-9-inches anyway.

But is $800, the rumored price, set at the right spot? It kind of depends what type of OS this thing is running. If it turns out to be a large screen iPod touch like we originally reported with the same feature set but simply a larger screen, $800 might be a little high. But Apple gives the 9.7-inch tablet the full power of OS X and not limits the capability at all, $800 might be a bargain.

The CrunchPad has refueled the tablet fire. Consumers want this form factor. That is, as long as the OS can handle the web and the price is right.

Rest assured it is not and no company in China has any idea how to make a CrunchPad. In fact, no one knows the secret except for Arlington himself and he will go with it to his grave.

Big Mike has been pretty quiet about the CrunchPad since it was first leaked the other month and for good reason. We’ve heard from reliable sources that Apple is still on track with an oversized iPod Touch in the coming months. We more or less know everything there is to know about the CrunchPad, but a few more specs have popped up thanks to the NYT and SF Biz Times. The CP, made by Fusion Garage, is 16mm thick with a 12-inch screen encased in aluminum.

Arrington will supposedly schedule an event for the end of this month or early August. It will retail for less than $300 and be available “as soon as possible.” I wonder if we’ll get some company issued CrunchPads for CrunchGear.

NYT
SF Business Times

The video has now been removed from YouTube.

This was not a sanctioned or official video, nor is it even very interesting. It’s just the last prototype being taken out of its box (which should be sort of obvious, pictures of the prototype in the video have been circulating since April). It’s certainly not the launch prototype, pictured here, which doesn’t actually exist yet.

The only official information on the CrunchPad at this point is in the blog post I wrote a couple of weeks ago, and you can send an email to crunchpad@techcrunch.com for various updates. We’re planning an event in July to give more information. Until then, I hope we’ve seen the last of these ridiculous fingerprint smudged “unboxing” videos.

And that guest who took the video without talking to me first won’t be back at any TechCrunch events anytime soon.

By giving them a free e-reader.

Here’s Dumenco’s money shot:

In other words, hardware makers may have no choice but to turn their internet devices into multi-tier-subscription-based media machines, because there will never again be enough margin in the basic price of the hardware. And the more we get used to the idea of essentially subscribing to media as a way to pay for hardware … well, the more hope there is for media.

And this is abundantly true. If the NYT or Time Magazine or US Weekly creating something like the CrunchPad or the Kindle and gave it away to a certain percentage of subscribers, kind of like a cable box, with the understanding that they would need to subscribe to one or more magazines or newspapers on the web. The reader will be useless if you don’t subscribe to anything, obviously. You should also be able to recycle it easily it or send it back for a deposit refund. Think of it as the old timey beer growlers of media – you own it and it gets refilled down at the local content hole.

The current crop of netbooks won’t do the trick. I’m talking about a flat device with few buttons. It wakes up in the morning, charges via induction, and has great battery life. It needs to be color, sadly, for magazines like Vogue to jump on board and it would require a direct education for a mass of readers but it would be worth it. It would save paper, reduce the cost of distribution, and turn a mass of dead tree readers into screen readers.

We’ve been working hard behind the scenes on the CrunchPad since our last update in April, and have just about nailed down the final design for the device. We’re showing the conceptual drawings here today. In another few weeks we’ll have the first working prototypes in our office.

This launch prototype is another significant step forward from the last prototype. The screen is now flush with the case and we’ve decreased the overall thickness to about 18 mm. The case will be aluminum, which is more expensive than plastic but is sturdier and lets us shave a little more off the overall thickness of the device.

I believe the device now actually looks better than the original concept design we published last summer. Compare the images below to the first prototype and you can see how far we’ve come. If you’re interested, here’s Prototype B. Pictures of Prototype C, which is the device we’re actually demo’ing to people now, are here.

A lot has happened behind the scenes, too. Our partner Fusion Garage continues to drive the software forward, and we are in deep discussions with key partners to bring the device to market. If you’d like to see the previous CrunchPad in action, we have a previously-private video available on YouTube that shows our vision for the user interface and the last version of the software stack. This is a Linux based operating system and a Webkit based browser. The device boots directly into the browser.

The next time we talk about the CrunchPad publicly will be at a special press and user event in July in Silicon Valley. If you’d like to be emailed when new news comes out, send an email to crunchpad@techcrunch.com and we’ll put you on the list.

Here is the near-final industrial design for the CrunchPad:

The key uses: Internet consumption. The virtual keyboard will make data entry a pain other than for entering credentials, quick searches and maybe light emails. This machine isn’t for data entry. But it is for reading emails and the news, watching videos on Hulu, YouTube, etc., listening to streaming music on MySpace Music and imeem, and doing video chat via tokbox. The hardware would consist of netbook appropriate chipsets (Intel Atom or Via Nano), at least a 12 inch screen, a camera for photos and video, speakers and a microphone. Add a single USB port, power in and sound out, and you’re done. If you want more features, this ain’t for you.

Price? it can be built for less than $250, including packaging. Add in fixed costs and other stuff you have to deal with (like returns), and you can sell it for $300 and probably not go out of business. Physical design is important, and the software is the key to winning.

We stumbled through an initial prototype that barely booted, but we finished it in a month. Prototype B was much more impressive and usable. That effort was led by Louis Monier, with software developed by Singapore-based Fusion Garage and industrial design work by by David Yarnell and Greg Lalier from Dynacept.

Anyway, we’ve continued to tinker with the project, which is referred to as Mike’s Science Project internally (or, “that thing”). But we certainly aren’t ready to talk about anything more at this point. But we did meet with Fusion Garage again today to test out the most recent prototype (B.5?). This is a significant step forward from Prototype B because the software stack is now entirely customized. The last version had a full install of Ubuntu Linux with a custom Webkit browser. This version has a bottom-up linux operating system and a new version of the browser. We also switched from Via to the Intel Atom chip. The total software footprint is around 100 MB total, which is a solid achievement. Also, this time the ID and hardware work was driven by Fusion Garage out of Singapore.

In fact, all the credit should go to Fusion Garage. But frankly we weren’t planning on talking about it at all, it just isn’t the right time yet. But, to make a long story short, someone accidentally published some photos we took to the web, they were seen and shortly were everywhere (see lots lots lots lots lots more). Even our own CrunchGear couldn’t resist.

Ok, so now that what’s done is done, where do things stand? Well, I’m not ready to say yet. But one thing I’ve learned about hardware in the last year is that you need partners to actually make things happen, and the credit for what we saw today goes entirely to the Fusion Garage team. Those guys are rock stars.

Here’s are pictures of the various prototypes in chronological order if you’re interested. The first was our initial conceptual drawing.

It’s time for an update on the progress we’ve made on the low cost touch screen tablet that I first wrote about in July 2008 when I asked for a dead simple touch screen web tablet that boots right to the browser. Here’s our first post on the tablet, which we’re now calling the CrunchPad internally.

The idea is to get a new type of device into people’s hands for as cheap as possible (we were aiming for $200, it looks like $299 is more realistic). It fits perfectly on your lap while you are sitting in front of the TV, so you can look up stuff on Wikipedia or IMDB as you channel surf. It plays Flash video flawlessly so you can watch movies and TV shows on Hulu or Joost or wherever. Or listen to music on MySpace Music. Or use TokBox to have a video chat with your parents. Then check email and call it a day. Facebook, MySpace, YouTube, Hulu, Wikipedia, Google Docs and Gmail are the killer apps for this device.

Because the device skips the resource-sucking parts of the operating system and focuses on one application – the browser – very low end hardware can be used and still give users a desktop-like Internet browsing experience.

We built a working but very humble Prototype A in August. It barely booted, but once it did it was a working touch screen web tablet built on very low end hardware. And when I surfed the web with it, I knew I wanted one that worked properly.

Since August a lot has happened. First, we now have a team lead – Louis Monier. Louis, formerly the founder/CTO of AltaVista (he is credited with building one of the first Internet search engines), has also spent time at eBay (head of the Advanced Technology Group), Google and Cuil. Louis left Cuil in the Fall and has been spending his spare time working with outside teams to build the new prototype. He’s in love with the project, and we’re lucky to get his time.

Second, we’ve completed Prototype B of the CrunchPad and are ready to show it to you. I include pictures and video to show it in action.

CrunchPad Prototype B

The device has a 12-inch touchscreen with a 4:3 aspect ratio (which is ideal for web browsing in my opinion). It is powered with a Via Nano processor, which has performed at par with the Intel Atom in our testing. 1 GB of ram (its more than we need) and a 4 GB flash drive to store the OS and browser and any cache. Resolution is 1024×768, which means the vast majority of websites are viewed in full width without scrolling. The device also has wifi, an accelerometer (so when you turn the screen on its side you can view more of a web page), a camera and a four cell battery. Total cost of the device, when we include estimates for the case, codecs and other miscellaneous items, is just over $200. Prototype B is actually much less expensive because the screen we used isn’t very good. The price estimate includes a much better, more expensive LCD.

The case, which was designed and built by David Yarnell and Greg Lalier from Dynacept, is 12.5″ x 9.7″ x 1.3″. It’s about twice as thick as is needs to be without further engineering – we just built in a safety thickness in case of heat or other issues. The device weighs three pounds, partially due to the extra batteries we’ve stuffed into it to see how long we can run it without power. Still, the device weighs in at 2 oz less than the 10″ eeePC.

The software: currently we’re running a full install of Ubuntu Linux on the prototype with a custom Webkit browser. A lot of the work done to date has been on the drivers and the virtual keyboard, which you can see in the videos. The software has been created by Singapore-based Fusion Garage, who continue to work with Louis on the feature set and user experience.

More pictures:

Here are the videos:

What’s next?

We’ve completed our original goal of building a “dead simple and dirt cheap touch screen web tablet to surf the web.” The hardware is nearing lockdown. Software development is rolling. And we’ve spent very little money to get to this point.

We’ve received thousands of comments and emails from people who want this device right now. We’ve had tremendous support from the community in helping us build the prototypes, and Via has been flat out amazing with their support of the project.

We’ve also gotten quite a bit of interest from the investment community. The real question for us is whether this project has legs and should go forward towards production units, which is a very big step from a working prototype. That would require spinning the company off from the blog and building a team around Louis. It’s a decision we haven’t made yet.

Most of the work is transitioning to software and UI, and real industrial design work on the case is beginning.

We are still far from having beta units but there is now a team working on the project, and an incredible group of people and companies have reached out to us to help. We’ve learned a lot about building a hardware device over the last few weeks, and it’s clear that it is quite possible to build a high performance web tablet in the price range we anticipated.

A teaser picture: