Saturday, January 29, 2000 - Page updated at 12:00 AM

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The `e' in ePods? It stands for `easy'

Seattle Times technology reporter

A SEATTLE START-UP is at work on a $599 Internet appliance that aims to demystify the Web for people who are afraid of technology.

Like it or not, technology has transformed the letter "e" into a prefix for things electronic. But, with PCs still considered difficult to use, a growing number of new devices are emphasizing "e" for easy.

Enter ePods, a Seattle-based start-up pushing a product that at first blush looks like an Etch-a-Sketch on steroids. Due out in May, it is aimed at people who have never before owned a computer or surfed the Net.

It is facing other entries in a category that's fast gaining steam and includes Netpliance's i-opener, Dell's WebPC and Compaq's "EZ" line of machines. Microsoft is expected to have its own device, Web Companion, later this year.

With prices coming down and a growing acceptance of e-mail and e-commerce, the thinking at ePods' digs in Seattle's Belltown neighborhood is that folks who are staying away from PCs are doing so chiefly because they justifiably dread them.

"The consumers we're going after are not worried about (product) specs," said Shae Hong, 22, the company's co-founder and chief executive. He thinks terms like megahertz and RAM have intimidated them, as have such obstacles as hassling over which Internet service provider to choose.

Hong is heading up a team of roughly 70 twenty-somethings who are designing software for the ePod, which is tentatively priced at $599. He grew up in Tacoma, attended Charles Wright Academy, and later played strong safety for the University of Washington Huskies.

He remains 10 credits short of his bachelor's degree in business while he tends to his company. He expects no problem raising $40 million to $50 million in a third round of financing before the product launches.

In keeping with its "non-tech" marketing plan, ePods debuted its product not at the two top high-tech shows, Comdex and the Consumer Electronics Show, but at the recent annual Housewares Show in Chicago.

The company's plan is to sell the product not in Circuit City or CompUSA, but in retail stores like Macy's, Bloomingdale's and Target. On board to help make this happen is Mount Prospect, Ill.-based Salton, a leading marketer of housewares such as the George Foreman grill, Toastmaster appliances, and the Breadman and Juiceman. On Monday, Salton is planning to annouce a $2 million equity investment in ePods.

In addition, ePods has hired San Francisco-based Publicis & Hal Riney, the advertising agency behind such brands as the Saturn line of cars, eToys and Henry Weinhard's beer.

Under the ePod's diminutive "hood" is a stripped-down version of Windows. The device will also use a tweaked version of Microsoft's Internet Explorer as its Internet browser. Hong promises users will never see a Windows start-up screen.

The device weighs 2.2 pounds and sports an 8.2-inch color LCD screen. Users can activate a touch-screen keyboard that takes up about a third of the screen. Or they can use a shrunken keyboard that works with a stylus.

Like Palm devices, ePods will feature organizer programs, as well as Web access and an e-mail program. The ePod will also come with $19.95-a-month Internet access.

Hong promises a hassle-free setup experience, with only two cords to worry about, one for power plug, the other for a phone line.

He declined to be pinned down regarding the ePod's hardware specifications, but said it would be competitive with comparable devices.

Hong started developing his business skills when he was 12, helping his father, Peter Hong, with a chain of stores called Basket Market that competed with Pier One.

"He just threw me into action," he recalled. " `This is how you're going to learn,' he said. " `Get out there. Help me negotiate deals!' "

Hong forged alliances with associates he met after his father's business shifted toward consumer electronics. Hong's father has helped fund the new enterprise.

Copyright (c) 2000 Seattle Times Company, All Rights Reserved.


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