Sunday, December 21, 2008

Should I Join the Pack And Write "Very Negative Stories" About Carl Freer?

I got a comment from a Danish journalist who questions my motive for writing about Carl Freer and Gizmondo. You can read her comment below my previous blog. Here is my answer:

Hi Dorte,

Thanks for your comment where you suggest that I have written “very positive stories on Carl Freer”, implying that I must have a “reason” for that, other than my duty as a journalist to listen to all sides, hold my judgment until I have sufficient proof, and not to engage in the sort of pack journalism that has been rampant when it comes to Carl Freer and Gizmondo. The fact that my reporting and interviews are seen as “very positive stories” says more about the current media climate in Denmark and Sweden than anything else. Does the Jante Law oblige me to write “very negative stories on Carl Freer”, and make sure that nothing Carl Freer says in an interview could be even suspected of having “a positive tone”?

As I’m sure you know from reading my stories, I have never stated that Carl Freer is either guilty or innocent, but I have made clear that I believe that much of what has been written about him reflects flawed and sloppy journalism.

As for any personal relationship, I had never heard of Carl Freer before Stefan Eriksson’s infamous crash on Pacific Coast Highway in Malibu, which led to a request from one of my clients to follow the story. I did what most journalists do these days when they start working on a new story, i.e. I googled. My initial view of Carl Freer and Stefan Eriksson was that they were criminals just as they were portrayed in Swedish, British and American media, and when I interviewed a traffic sergeant at the Malibu station, he gave me the same story of Stefan Eriksson and his cars and Carl Freer and his 10 million dollar yacht in Marina del Ray, but when I, after Carl’s arrest in April 2006, interviewed Steve Whitmore, senior media advisor at the LA County Sheriff's office, he told me that he had been released and was “cooperating fully with us.” But if Freer was such a hardened criminal, why would he do that? This was one of these little things you run into when you are working on a story that doesn’t make you change your direction, but leave a question hanging.

I went on to cover other stories, now and then checking for news about Carl Freer’s new venture Xero Mobile, until my editor at one day got an email from Carl Freer addressed to me. He wanted to talk. And we did, first over the phone, and later during a full day interview in New York. What he told me convinced me that he at least deserved to be heard, and when I went back and reread the stories about Gizmondo and Carl Freer, I realized that they were built on very loose ground, and that was also the case with Wired’s long piece, and the one in Los Angeles Times. One problem for the journalists was that Carl Freer – who was the brain behind Gizmondo - didn’t talk to reporters, as he was deeply suspicious of all media after the Gizmondo collapse, and as he had been advised by the investigators not talk to media while the investigation was ongoing. But now that it was all but over, and the executives at Gizmondo Europe Ltd., was cleared from suspicions of criminal wrongdoing, he was free to speak, and he chose to talk to me, as he felt from reading my stories that I could give him a fair hearing.

As I wrote in my first article after my first interview with Carl Freer, I was initially hesitant to meet him, even more so alone in a SoHo hotel-room. I still thought of him as potentially affiliated with Stefan Eriksson’s “Uppsala Mafia”, and didn’t really want to get “involved” with them, even though "mafia" in Sweden has very little to do with the real thing. Hence, he is not an old friend of mine, and no, I don’t have any financial interest in writing him up or down (I would probably have made more money from covering him if I had gone with the flow and just whacked away at this Swedish Piñata).

You also ask if he impresses me. Well yes, he does. He is brilliant, well spoken and thinks strategically. Having covered IT for over two decades, I can say that the series of IT-based projects that led to the Gizmondo made a lot of sense. He seems to be a clever entrepreneur who comes up with smart business models that integrate the latest technology with innovative business models. I don’t see why he would spend so much time and effort on actually building things and developing business models, if all he wanted to do was to scam people. And if he besides already had pocketed tens of millions of dollars from the Gizmondo Europe crash, why would he want to do it again, unless he was pathological somehow? It doesn’t make sense.

But the fact that he has a great personal charm doesn’t preclude that he still could be a crook. You don’t have to be a brute to do bad things. But you do need proof before you accuse somebody of crimes. And the only thing Carl Freer has been convicted of is – as far as I know - signing his parents’ names to a student loan check for 20,000 kronor (about US$2,500). He claims that he did so with his parents’ permission, but the bank didn’t accept that. I interviewed Carl Freer’s mom Marianne about this on April 27th, and she confirmed his story, explaining that the incident happened after her husband had left her, and that she and her son was having a hard time financially. Her husband had agreed to cover certain costs for the family, but they had problems in communicating, and there was some confusion over the details.

This incident, which occurred when Carl Freer was 17, is the only time when he has been convicted of anything. But that didn’t prevent a big Swedish newspaper from opening their major expose with depicting him as a person who rips off his parents. “I thought I was going to faint when I opened the paper that Saturday morning,” Marianne told me.

One more thing: Yes, the re-launch of Gizmondo has been delayed several times, but what does that prove? Have you ever heard of other companies delaying products? Do you remember Microsoft’s operating system “Chicago”, which after years of delays was launched as Windows 95? The fact that Media Power has been forced to delay the new Gizmondo several times proves, if anything, that they are not sitting on a secret stash, but have to struggle to secure financing and to deliver the product. Neither have they repeated the huge mistake of going public without a product to sell. Hence their dependency on private capital and Chinese conglomerates.

Part of the problem with media's coverage of the Gizmondo affair is that it is such a great story, and I would be surprised if it doesn’t end up as a Hollywood movie with Matt Damon as Carl Freer and Philip Seymour Hoffman as Stefan Eriksson.

A blockbuster for sure, but will it capture the truth? I don’t think so.

Hans Sandberg

Friday, December 19, 2008

Yes Dear, There Will Be a Gizmondo, Just Not This Year... And It Will Be Different

As you may have suspected by now, there will be no launch of the new Gizmondo in December, but it's not because of any evil shenanigans on Carl Freer's part. It was the financial crisis that killed his ambition to bring out the revived Gizmondo in time for Christmas.

I suspected for a while that at least some of his investors might have taken a beating in the global financial meltdown, and that that was the explanation for why we never saw the promised new Gizmondo web site (should have been up by mid-October) and why November passed without any news about Gizmondo, only to be followed by a very quiet (Giz-wise) December. I was to busy with other reporting to pursue my Gizmondo track, but late November I emailed Carl Freer and told him that if you don't come out with an explanation soon, you will be gobbled up in the blogosphere. He said okay, and we decided to meet on December 2nd, which turned out to be the same day that the news about the disappearance of the Danish IT-entrepreneur/suspected swindler Stein Bagger hit the fan so to say. And Carl Freer was of course immediately linked to the case by Danish and Swedish media, which smelled a chance to finally nail Mr. Freer to the wall (they are not that into crosses in Scandinavia).

Carl Freer, December 2008

The sudden media storm made me fear that Carl might want to back out of the meeting, but there he was, greeting me with a big smile, and giving me a three hour interview/presentation in presence of his new president, Doug Toth, Ivan Kozhuharov, CTO, and James Hunt, who these days besides representing the British liquidators, is a consultant to Media Power.

I had a long list of questions, and they had some serious demo's to show off. (More about that in a later report).

The only no-show was the new Gizmondo.

"Unfortunately, we’ve had to reschedule the launch of Gizmondo. It's due to the economic climate in the U.S., as well as in the rest of the world. It has affected us in our ability to fund and get funded in regards to the manufacturing of components," Carl Freer explained.

"We’ve had some very, very 'touch and go' moments here for three months. It has affected everyone. I was at one point thinking of abandoning the whole project, because I didn’t see a way out of it; a way to fund it. I don’t have half a billion dollars or 300 million dollars. You can only try and do your best," he told me.

The Chinese company that was going to build the new Gizmondo, and already had shipped a first small batch, were dragging their feet, probably because of the financial downturn, and this left Carl Freer and his team increasingly frustrated. What they did then was to rethink the whole project, and start to look for alternative ways of getting the Gizmondo to the market. They hired a "scrubber" in Shenzhen, China to locate OEM-manufacturers that might want to work with Media Power. But going down this path required a redesign of the Gizmondo, so the new Gizmondo Carl Freer is working on right now will use an existing chip set, like the ones you can get from companies like HTC. The idea is to add functionality to smartphone device and add an advanced 3D graphics chip, probably not Nvidia, but the OMAP3 from Texas Instruments. With a new PCB, they could then stuff the electronics into a new package. Carl Freer told me that he still likes the original shape of the Gizmondo, but is open to the possibility that the new one will be different.
"It’s a question and one that I’ve been battling with. In an ideal world, I would like to have the same design, because I am affectionate and feel part of that. I would have liked to have the same design, but the reality is that we can’t fit all the new componentry we need on that size chip set."

The key thing is not the shape, but the open platform.

"If you look at gaming devices today, they consist mainly of the Sony PSP and the Nintendo DS. There are a few other renegades, the Game Park and so on, but what we are talking about is creating a fully wireless Pocket PC, one that also has a gaming engine. There is nothing out there in the market that has the open source AppStore compatibility that we are talking about. I believe that the majority of games for the Xbox soon will be sold through Xbox Live. This will make connectivity more important than retail, so the Apple AppStore, and the Xbox Live is very, very interesting. Could you imagine if Xbox had an open platform, and we could build games and just post them, and see if they sell? It’s the same kind of mentality behind what Android is putting up now. In fact, Android has arguably less restrictions than Apple, but you still have to submit and they have to put their little finger on it," he said verbatim.

The new Gizmondo will come in two versions, Windows CE and Linux based Android. And as it will be built on a smartphone platform, it will have a phone! But, it will not cost 99 dollars, for the simple reason that it costs more to by from OEM's than if you have a large manufacturer who can build everything from scratch.

Santa, or at least Carl Freer, does however have some good news for at least some of Gizmondo's fans. He told me that owners of the original Gizmondo will be able to trade it in for the new batch he got from China before the world went belly up.

Ho, ho, ho!

Hans Sandberg

Correction Dec 29, 2008: Carl Freer changed his statement about online sales of Xbox games in response to feedback from a reader who challenged his statement that a majority of Xbox games are sold online. This is not the case today, but Carl Freer is optimistic about the switch in a near future from retail sales to online sales of games (that can be downloaded).

Teknik360 report about the delay of the new Gizmondo

Here is a link to my first report for, which is a new IDG news site in Sweden.

Sunday, December 14, 2008

Hot Gizmondo News In the Pipeline

This is a teaser. I hate to tease, but I have too much in my bag to just dump it here, so I will have to restrain myself. Sorry. The reason is that I sat down on December 2 with Carl Freer and his team in their New York office.

We spent three hours going over a lot of superhot stuff relating to Gizmondo's whereabouts, the state of Media Power, augmented reality and Carl Freer's plans. The same morning I got email from Denmark wanting to know if it was Carl Freer who had lent Stein Bagger, the fugitive Danish CEO of IT Factory the car that he used to drive across the country before turning himself over to he police in L.A. I had planned to deliver the news later that week, but the IT Factory thing blew up and it turned out that it was Carl Freer's partner Mikael Ljungman who had lent Bagger his Audi S8 although he didn't know then that Bagger was on the run, and once he found out convinced him to turn himself in. I did a lot of reporting about this for Berlingske Tidende, the leading Danish morning paper, and my reports were quoted by other papers and by radio and TV. That's the reason why I had to put aside my exclusive interview with Carl Freer where he reveals everything about Gizmondo, GetFugu and Media Power. Check back later to find out more. But bare with me as I pour over the interview, trying to sort out things. I'll be back!

Hans Sandberg

Hubble Telescope Images