Will Peek's $100 Lo-Fi BlackBerry Take Off?

Is there a market for a cheap, one-function email gadget -- today's equivalent of a two-way pager? Peek, a NY-based startup, is about to find out.

We'd been anxiously waiting for the last year to hear more information from the company, formerly known as Txtbl. But to our surprise, Peek has been quietly posting a few updates here and there for the last few weeks -- including the first photo of its $99.95 device, coming to Target stores nationwide on Sept. 14 (and earlier on the Web).

What is it? A thin gadget -- in cherry, aqua, and grey -- with a full QWERTY keyboard that sends and fetches email over T-Mobile's network for $19.95 a month, according to Amol Sarva, Peek's CEO. That's it. No mail-in rebate, no long-term contract, no phone calls, no Web browser, no digital camera, no App Store, no SMS, no MP3 player, no mobile TV -- just email, including Google's GMail, Yahoo mail, AOL, etc.

Will it be a hit? Maybe.

According to research firm M:Metrics, just 13% of U.S. mobile subscribers use email on their cellphones. Sarva, a former Virgin Mobile USA exec, says it's closer to 7% when you only consider frequent users. Assuming everyone with a cellphone has an email account -- a fairly safe assumption, we think -- that's around 90% of the country that's not already checking email on the go. That's either a big market, or a big group of people who have no interest in mobile email. Probably somewhere in the middle.

Peek's biggest hurdle: In the last year, the cost of rival devices that let you use mobile email and do other things -- like make phone calls -- has dropped significantly. A Palm Centro will also set you back around $100 after carrier subsidy and mail-in rebate (AT&T offers one for $70), and also includes access to the mobile Web, IM, phone calls, etc. It's smaller, so harder to type on, but the biggest difference is that it costs $10 more a month to use. A BlackBerry Pearl, which has better email but doesn't have a QWERTY keyboard, runs about the same rate as the Centro. And $100 more than that gets you an Apple iPhone with an 8-gig hard drive, widescreen movie player, etc.

Sarva's response: Peek is more elegant and easier to use than a cheap smartphone. This is probably true -- we haven't seen a Peek yet -- but is that enough?

To be sure, we know there's a market for simple, one-function devices. The Flip video camera, for instance, has been a commercial success, despite only being modestly cheaper than other, more sophisticated devices that can record video, like most digital cameras.

But we're not sure most people would pick the modestly cheaper Peek over slightly more expensive multi-use gadgets. At the same $100 price as the Peek costs, and $10 more per month, we'd probably sooner deal with the rebate hassle and buy a Centro or a Pearl -- or splurge for an iPhone. At half its current price -- say, $50 up front and $10 a month for service -- Peek would be a much easier sell.