Interview with Andrew Caffey, Executive Vice President, PF Digital

The eStarling frame from PF Digital was one of the first digital picture frames to have wireless capabilities, making it an object of the techno-lust. That lust turned sour, though, when customers found that the first batch of eStarling frames had problems with stability and WiFi signal strength. Frustrated users vented on the Web and eStarling took a public relations drubbing.

The eStarling is back with version 2.0, which PF Digital says adds Mac compatibility and fixes the WiFi and cosmetic issues that frustrated customers.

To make amends, the company is replacing all eStarling 1.0 frames with the new eStarling 2.0. The frame is also for sale to new customers at US$249.99.

To find out more about the replacement program, what PF Digital learned from the problems with the first frame, and what new features are coming to eStarling frames later this year, we spoke on May 4 to Andrew Caffey, executive vice president of PF Digital.

WPF: What was the cause of the problems with the frame that shipped during the 2006 holidays?
AC: We had one or two poor decisions that were made by our manufacturers in China on the hardware that was selected for our frame design, in particular the chips that were selected. I’m afraid in our dash to get the product to market in time for the Christmas season, these frames were not individually tested and the problems that resulted from the chip selection weren’t evident to us until the frames got into the market.

Many frames were sold at the Christmas season through the ThinkGeek.com site. What we’ve done for all of those purchasers — we felt very bad about those problems of course — and have moved to replace each and every one of those early eStarling frames with a new eStarling 2.0. I understand those customers will be receiving those new eStarling 2.0 frames starting (Friday, May 4).

How did the problems happen? Was the rush to ship before Christmas the root problems that other problems to cascade?
I think that was part of it. I don’t know if it was a cascade of problems, but it was a combination of things, and one of them was that the frames were not adequately tested before they went out. And that’s one of the lessons we learned deeply and took to heart. We’re very pleased to see that the eStarling 2.0 frames have been individually and thoroughly tested. We’re confident that all the problems in the early frame have been solved and we’re very pleased that all the purchasers of that early frame have received a new frame.

When customers first started finding problems with the earlier frames, there was a lot of very negative feedback online. How did the experience of getting that negative feedback inform the process of creating version 2.0 of the frame? What was learned from that experience?
I think it’s fair to say that we learned deeply a few hard lessons. One of them is a fact of this business that we knew going into it: consumer electronics is a very difficult business. It’s difficult to get it right. It’s difficult to bring a truly innovative idea to the marketplace. I can say (the feedback) was dispiriting. We are so excited about what this frame can do. The company was let down in the manufacturing process.

I can tell you that in January I traveled to Shenzhen to meet with our new manufacturer, the company that is making the 2.0 frames. It is the Great Wall Computer Company of Shenzhen, which is a very large, very well established organization that is a most impressive company to visit. I’ve toured their manufacturing facilities, I’ve met with the entire manufacturing team and we have worked very hard to make sure that the lessons that we learned with the first frame are learned well and that those mistakes are not repeated. I think with 2.0 we’ve got it right.

How does the version 2.0 frame address the issues people had with version 1.0? It certainly seems different just from looking at the photos of it.
The appearance is slightly different. We wanted a sleeker frame, a simpler appearance. We’ve removed a couple cosmetic aspects of the first frame. The second frame doesn’t have a logo on it. It is a very simple, sleek design.

The larger differences, of course, are in the hardware and the software. We have a WiFi connection that is tested at 100 feet. And I can tell you that in the frames I have received and set up in my home and office, it does a very good job of grabbing a WiFi signal. In my home, for instance, I have a wireless router in the third floor home office and have no trouble operating this frame two floors down, sitting on the mantelpiece in my living room. I think that’s the most important change and difference than we’ve built into 2.0 – a very effective internal WiFi antenna. If you saw the 1.0 or read any of the bloggers, it had an external antenna that had a little dongle that attached on a short cord. That’s no longer a feature of the frame. In 2.0, all of its components are internal.

So, it has the appearance of what we might say is a traditional picture frame, but it has internalized the WiFi components. It has the new chip hardware and updated firmware so it is a lot more different than the few cosmetic differences.

For owners of the version 1.0 frame to get it exchanged for a 2.0 frame, do owners need to come to you, show proof of purchase, and have you send one to them?
That’s actually being managed by ThinkGeek. I think they have been in touch with purchasers. I have not seen copies of the correspondence that they sent to their customers. From talking to our contacts there, it took them a week or 10 days just to organize their customer lists and the frames that were provided and prepare to send those. I can’t describe the customer experience for you because it’s being handled by ThinkGeek.

Is it your expectation that virtually 100% of the people who own version 1.0 of the frame will get version 2.0?
That’s my understanding, yes.

How much is it going to cost to replace all those frames? It seems like a huge undertaking.
The hard lesson is that it’s difficult being a consumer electronics company. And that’s part of the hard lesson — that it can be expensive — but we’ve got to do things right, even if it’s expensive. Those frame owners can be an important part of this business as it goes forward. And I’m sure we’ll hear from them and I hope that they are as pleased as I know they will be with the new frame.

So the 2.0 frame is starting to ship to customers May 4?
Yes. I heard this morning that the first of the customers of ThinkGeek that are receiving the replacement frames are receiving them as of today. They were shipped yesterday or the day before.

Is ThinkGeek going to sell version 2.0 of the eStarling frame?
Yes. We’ve just sent them a shipment of frames and they will be continuing to offer it. I learned this morning that they will be putting out either an email to their customers or simply including (mention of the frame) in the (regular) email they send describing the 2.0 frame and it’s availability at ThinkGeek. We expect that today (Friday) or Monday.

Are there plans or initiatives to get other retailers that carry it?
Yes. We’ve talked to so many people, so many distributors, so many retailers. There are many plans. We are humbled by how large this undertaking is. We are starting to sell through the eStarling.com website and, of course, ThinkGeek. We are lining up others as we speak, but we have to start this business in a way that’s manageable. Right now, we are managing all we can selling though our own site and through ThinkGeek. It’s also a matter of guessing the market demand and the speed of market demand in bringing product in, so we’re balancing all those factors. We are talking to other distributors. We think the future is very bright for this product and building the distribution for it is a big part of the business.

How many people are there at the company?
We have a development team in China of eight people working full time in Shenzhen and Hong Kong. We have two of us working in US operations. [Ed. Note: Many other operations for the company – shipping, distribution, PR – are handled by outside vendors.]

Will the business development side of the company need to be expanded soon?
We are going to be building toward what we anticipate to be a very large Christmas season. It takes the time from early May to run up to the Christmas season. There will be future innovations that will be available a little later this year. It is a balancing act. It is a challenge. But we think that much of this market is going to be, at least initially, viral. It’s going to be a lot of online attention for this product. We think that will grow and as it grows, we think our distribution network is naturally going to grow as well.

What are your projections looking like for Christmas this year? Pandigital had a big Christmas last year and is expecting to have an even bigger one this year. What do you foresee?
I’m really not one to speculate on it. We are going to be feeling this market and listening to our market in the next few months. I think in a few months we’ll have a much better picture. I know that last Christmas we made a limited number of frames available and they sold out within a week or 10 days, just on the ThinkGeek site. They were very hotly anticipated. I don’t know what to make of that experience in projecting for this coming Christmas. All we can do at this point is get the product out there, get feedback, and we’ll hear from our market loud and clear.

What are those additional innovations that you mentioned?
I’m really not in a position to talk about too many specifics, but I can tell you that we’re anticipating an innovative inclusion of music and audio with the screen. We’ve very close to announcing a new innovation of text messaging with the screen and eventually, I think in the first or second quarter of next year, we’ll be looking at video.

It’s one of the exciting things about a digital picture frame with a WiFi connection. Those technologies suddenly become very meaningful to an owner of one of these frames. It’s not simply standalone and self-contained as a traditional frame is, but it’s actually an Internet machine, which has dramatic implications for what the future technology will hold. I’m constantly surprised, as a non-technologist, at how quickly our technology team is developing these new ideas.

Our projections are that we should have a new announcement over the summer on the audio features that we’ll be building into the eStarling frame.

This summer we’re also going to be offering a larger screen. That should be coming probably June or July.

Are you envisioning a future that’s a little bit broader than just an Internet-connected picture frame for these kinds of products?
I use the term Internet machine because, in my discussion with people, it is a distinguishing feature of the eStarling frame. That it is a machine that is designed for Internet use. It’s easy to control the photos on the frame from an Internet site. In other words, it stands in very stark contrast to any other picture frame on the market because it designed primarily for use as an Internet machine. I use that phrase on purpose, it is meaningful to me, because I’ve lived with and tested a variety of other frames that are on the market and I’ve not seen any other frame that I would describe as an Internet machine.

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