Touchscreen trend takes off

Start-ups and computer giants hope touchscreens are path to tech gold.

By Stephanie N. Mehta, assistant managing editor

apple_iphone_3g_s_2.03.jpg
The iPhone is a touch-screen trendsetter.

NEW YORK (Fortune) -- Touchscreen technology is having a golden moment.

Fueled by the success of Apple's (AAPL, Fortune 500) iPhone, various wireless phone makers have introduced their own touch-screen devices, most notably Palm's (PALM) Pre, which launched earlier this month. (Gartner Research estimates 50% of all smart phones will be equipped with touch screen by 2012.)

All the major personal computer makers are planning to launch machines with touch-screen technology, if they haven't already. And this fall, Microsoft (MSFT, Fortune 500) will release its Windows 7 operating system, which will touch-enable countless Windows-based applications.

"The technology has been around for more than 10 years," says Amy Leong, a research director at Gartner. "The iPhone brought the touch screen into the limelight, but now consumer electronics makers realize the user interface will drive the next wave of [product] differentiation."

Every digital company -- and quite a few upstarts -- are racing to deploy touchscreen technology. PC and cell phone makers are hoping touch screens will prompt consumers to upgrade their gadgets -- and even pay a premium for such hands-on computing. Microsoft earlier this year invested in N-trig, a private Israel-based firm that is working on "multitouch" technology that enables users to enter information using fingertips and by tapping a special pen on the screen.

In a January 2009 report, Leong notes that touch screens are permeating "every aspect of our digital lives," including television remote controls, refrigerators and portable media players.

Better room service

Indeed, the use of touch screens for basic transactions predates the iPhone phenomenon. Consumers long have been using touch screens to check themselves in at the airport or withdraw money from cash machines, and many restaurants use touch screen order pads and registers.

Incentient, a Jericho, N.Y., startup, aims to put a touchscreen terminal in hotel rooms. The touchscreen panel would give guests the ability to order room service, contact the valet, make a spa appointment or check out -- all electronically.

Co-founder Patrick J. Martucci, who previously founded and ran tech support company United Asset Coverage, says he and his wife, Jennifer, got the idea for the business during an error-filled hotel stay last year. At one point, Martucci recalls, the couple started talking about how much better it would have been if they could have just tapped on a simple screen and placed their room-service order.

Martucci hopes to make money by following an ATM-style model. Incentient will supply the hotels with the screens, software and installation in exchange for a transaction fee each time a room is occupied. He eventually hopes to offer the technology to cruise ships and restaurants.

Incentient isn't yet installed in any hotels, and it faces stiff competition from niche companies already deploying touchscreens in restaurants and big enterprise technology companies such as HP (HPQ, Fortune 500), which offers some custom touchscreen services for kiosks.

But Martucci says he expects soon to announce an installation with a major hotel brand. And Jerry Colangelo (former owner of the Phoenix Suns, among other teams) says he is interested in deploying the screens in a new hotel business he's planning to launch.

Colangelo, who says he's in the process of acquiring "at least one hotel property" but declined to provide additional details, says Incentient's service has the ability to make hotel operations more efficient and less paper intensive (no room service menus).

But he mainly like the offering because he thinks it will help hoteliers better serve customers.

"I think it will help you differentiate yourself," Colangelo says. "People will go where they are best served, and where they feel they are being catered to. I think it has a tremendous amount of potential."

So does all this talk of touch mean the end of the Qwerty keyboard? No way, says Gartner's Leong, noting that after the iPhone launched, most of the wireless phone makers deployed devices that incorporated both touch and keypads. "We think all devices will be enhanced [with touch technology] over time," she says, "but I don't think the keyboard will go away." To top of page

More Galleries