Tag: ipad

The New iPad: Leaving the Competition Behind

It would be extremely difficult to make the case that any competitive tablet in 2012 and perhaps even 2013 can hold a candle to the new iPad. Not only do I not believe that Apple competitors fully understand the tablet market but they have also not been investing in the kind of technologies needed to compete in this market.

For many the tablet has simply been a me too strategy. Something that historically has either not worked or only worked for a short time thus not being sustainable. What you are forced to walk away with after evaluating the new iPad is that Apple is more serious about this new category of computing than anyone. I would also argue that they are also the best oriented to not only continue to define this new category of computing but to also dictate it as well.

Dictating the Hi-Resolution Race
Every Android smartphone owner who goes gaga over their somewhat high resolution screen should thank Apple. The Retina display kicked off the trend of higher resolution phone displays. Once consumers saw, and are still captivated by that screen, it became very hard for a device to be successful at the mid to high end without a high resolution screen.

The same will now be true of tablets. There will now be a resolution race to catch up with Apple’s Retina display on the new iPad. Which you absolutely have to see to believe. There has never been such a high resolution display on a mobile device and seeing such clarity and image quality on a bigger screen changes the experience with the device in a way I never imagined.

Because of that there is nearly zero chance that consumers walk into retail, as many do, and check out the new iPad and even consider any competitive tablet that is on the market or will hit the market this year. I know that sounds harsh but as I stated the competition does not understand this new category of computing and they are not doing all they can to compete in it. Therefore, for the time being, the competition will not stack up to the new iPad.

This hi-resolution race may also come in interesting ways to notebooks. As I observed, once you see the retina display on the new iPad it is hard to look at other screens comparatively. This may be one of those things that becomes necessary to bring to every computing device. Its sort of like HDTV, once you went HD you would never go back.

Apple is dictating the hi-resolution race and it is a great thing for the industry–as soon as the competition can catch up.

Tablet Software
If any area makes it more glaringly clear that other tablet vendors don’t understand the category it is software. My experience, and many others, line up with Tim Cook’s assessment of a lack of pure tablet apps on the Android platform. Several times a week I go browsing searching for tablet apps on my Android tablets and always walk away disappointed. There are a handful of great tablet apps on Android but when you compare that to app shopping / browsing on iPad it is night and day.

Interestingly, I don’t think Apple gets enough credit at large for basically rejuvenating the entire software industry. Think about how passionate not only developers but also consumers are about software. When all that existed was notebook and desktop PCs I don’t recall such excitement over software. This has always been the case with the Mac community but that is a column for another time.

If you think about it there is no reason glaring barrier to entry for great tablet software to be made for competing platforms. There may be economic, lack of desire, lack of understanding, etc, but nothing by way of technology inhibitors standing in the way.

Apple on the other hand, has what I now consider an insurmountable lead with iPad apps and it will be at least two years, if not longer for other ecosystems to even get close. Even if they did Apple won’t stand still and two years from now their software ecosystem will be even bigger and stronger.

The iPhoto demo alone on the iPad was one of the best software demonstrations I have seen in some time and perhaps the best example of the value of touch computing to date. And by the way its $4.99. If nothing else Apple proved that with software the possibilities are endless with this new category of computing. And hopefully now it is clear to the masses that the iPad is a personal computer and not just for consumption. (Teaser: more on that in my column tomorrow )

So how do others compete? Honestly, at this point in time I am not sure. Apple’s vertically oriented strategy gives them such an advantage that makes competing with them, especially in tablets, extremely difficult.

It appears that many Wall St. Analysts feel the same way. Many of the notes to clients I have seen so far make the bold claim that Apple is dramatically in front of competitors and are reiterating a strong buy for Apple.

I am not saying that competitors should give up. Apple is challenging them to innovate and fully grasp this new category of computing. This is one of the most exciting categories of computing that I have ever encountered.

The New iPad: Setting the Stage for Innovation

This morning Apple introduced a new iPad and with it has raised the bar for anyone creating a competitive tablet. The iPad, with its new Retina display that delivers 2048 X 1536 resolution, is clearly the highest definition tablet on the market. More importantly, as Apple pointed out, the work to create this type of HD quality experience on a tablet took many years of effort and tight integration with their new chip, which will make it very hard for competitors to match anytime soon.

Apple has punched up the power of the new iPad with a custom version of their ARM processor called the A5x, which is a quadcore chip designed specifically to boost any image or video displayed on their new Retina screen. One only has to view the new iPad against an older iPad 1 or 2 to see the major differences between the products. And it is even more pronounced when you view it next to an Amazon Kindle Fire or any of the other tablets on the market with standard definition displays.

With the new iPad display, there is no pixilation whatsoever on pictures and video and text in books is sharper then ones in any real book outside of those designed with high res text and images. And saturation of images and video are 44% greater then on the older model iPads.

Apple also adds a new 5-megapixel camera that takes video in HD, has a much larger sensor then in past iPads and has a 5-element lens with backside illumination and an IR filter that gives amazing color and white balance. And a new dictation feature is now added to the keyboard making it easy to dictate words into a document quite accurately and easily.

As expected, the new iPad also has an LTE option. It includes radios that cover EVDO (Verizon) HSPA GSM, HSPA+, DC-HSPA and LTE, which make’s it a world capable communications tool out of the box. And it will have the same battery life as iPads in the past. 10 hours for continuous use without LTE radio and 9 hours with.

Prices are the same as on the older models, although Apple will now offer a 16-gig version of the iPad 2 for $399, a new price point for iPads and one that will make it available to a broader audience. And the design is about the same so it will work with most cases and peripherals without any changes.

They are also introducing new apps from iPhoto to an updated iLife and an updated version of iMovie that allows for much finer creation tools to new ways to edit and distribute your movies via iCloud. And while all apps work with the new Retina display well, software developers can enhance their apps for even greater resolution to make them optimized for this new display. Software is clearly the key differentiator. The iPhoto demonstration alone will wow consumers and highlights the power of touch computing.

All of this new technology integrated into the new iPad will have a major impact on the market for tablets. From now on, this iPad will be the standard all other tablets will be compared to. And with it should come an even greater opportunity for Apple to pad their lead in tablets.

Of course, we expect that other tablet vendors will try and match Apple with higher resolution displays later this year. But if what Apple says is correct, their integration of both this custom display optimized for this new processor could make it hard for the competition to directly catch up anytime soon.

I view Apple’s new iPad as a major advancement in tablet design and one that will have a major impact on the market for tablets. In business, the need for higher resolution tablets has always been strong, especially in vertical markets like medical, engineering, and even ones where handling a lot of data for viewing is important. At the very least, the new iPad should have even greater interest in the enterprise where Apple is already making major inroads. And consumers who watch movies and view their pictures on tablets will really be drawn to this HD experience, as the quality of their content will be the best on a new iPad.

Although there will always be a market for lower cost tablets, with the new iPad Apple has introduced a new measurement to the decision process for users at any level. And this will cause some challenges for buyers this holiday season as I doubt that any competitor can even come close to having something competitive by then.

That should give Apple a significant edge going into this holiday, as the iPad will clearly be the best tablet available bar none.

One more thing:

Apple also introduced a new version of Apple TV. While many had hoped that Apple would introduce an actual TV, that was not in the cards. What Apple did release is a new version of Apple TV with a new UI and more importantly, support for 1080P HD content. This is a big advance and one that current Apple TV users have been asking for. The price stays the same at $99 and the new software includes the Genius function and a completely new UI making it much easier to find content and display it. This should also be a hot product going into the holidays as more and more people are opting for products like Apple TV and the Roku box to handle their on demand TV experiences and movie viewing and the new Apple TV should be a big hit for Apple.

Related Columns:

The New iPad: Leaving the Competition Behind
The New iPad Display and the End of Paper

 

Windows 8 CP Tablet Experience: Distinctive yet Risky for Holiday 2012

A little less than a week ago, Microsoft launched to the public the Windows 8 Consumer Preview (CP). This is a follow-on to the Developer Preview (DP) that I’ve been using on a tablet and all-in-one desktop since it was introduced last September at the Microsoft BUILD partner conference. After 6 months and reportedly 100,000 code changes, is Windows 8 ready for prime time? Based on over 20 years of working with Windows development code and launching real products, I believe that Windows 8 is very distinctive but is risky for a Holiday 2012 release.

If you haven’t actually used Windows 8, I urge you to download it here. Truly using beta software is the only way to truly get the “feeling” of preview software and devices. What I will do is take you through the areas where I believe Windows 8 shines, needs work, and finally, areas where there’s not enough data to make a recommendation one way or another. I want to stress that my assessment is based on “preview” or “beta” code, not the finished product. Finished code is called RTM, or “Release To Manufacturing”. One very important hurdle for preview or beta is that it must be feature complete, which in some areas Windows 8 is and others, not.

Tablet Experiential Plusses

  • Fast response: My tablet booted very quickly and most times, woke up very quickly from “sleep.” Like DP, Metro was very fluid and fast as well, a first for a PC platform. Even installing apps was fast.

  • Content mashups:  Unlike Apple iOS or OSX, Microsoft has attempted to deliver what people really want who have multiple on-line services; a focus on the content and interaction, not the service. For example, those who have LinkedIn, Facebook, Twitter, multiple address books, etc., Win8 makes it simple. Instead of having to go to multiple services or apps, consumers go to apps like “People” (Facebook, Twitter, LinkedIn, Google), “Pictures” (Local, SkyDrive, Facebook, Flickr), and “Messenger” (Facebook, Microsoft, etc.) All of this saves time and places focus on the content.

  • Metro apps visually stunning: Microsoft pulled the “essence” of the app experience from Windows Phone, Zune and theXBOX 360. This results in beautiful looking apps like Music, USA Today, Weather, Bewise Cookbook, and iCookbook. When playing music, cover art and band photos are “silhouetted” on the display giving the feeling of a premium experience. Photos are huge and there is always a lot of white space. App beauty matters; just ask Apple.

  • Live tiles: Microsoft took what Android started in mobility, perfected the notification system with Windows Phone and extended it to the tablet. Without even opening up an app or swiping, consumers can see latest emails, next calendar item, most important stock prices, weather, and social media updates.

  • Dual use experience: I have been a proponent of modularity for years as it ultimately where the future of computing is going. With Win8 mid-term, Microsoft has the unique ability to capitalize on this with tablets, unlike Apple or Google. It’s simple; when users want to use the tablet on the couch or in bed, they use Metro. When I want the full desktop,they dock it with a full sized mouse, keyboard, 32” display and am doing real work. Microsoft ultimately needs to enable a way for a Metro and Desktop app to share the same local data files, but cloud-sync is an acceptable start particularly for the tech-aware audience.

  • XBOX integration: Like Windows Phone, Windows 8 CP integrates XBOX functionality quite well but is just a start. Using the XBOX Companion app on my tablet, I could find movies, TV shows, and music and even launch games to be watched or played on the XBOX. It is like an XBOX remote on steroids. I am still waiting for the enhanced “play to” functionality to share local content like photos and web pages to the TV via the XBOX. This functionality was discussed in-depth at the BUILD conference.

  • Search: Unlike the iPad, users can do full document and app content search. This what consumers expect and this is what Windows 8 CP delivers.

Too Early to Tell

  • ARM experience: Microsoft and its partners have been very selective on showing the Windows on ARM experience. It has been shown on stage and behind closed doors, but unlike the X86 versions, the public cannot touch the devices. Even at January’s CES show, the public was not allowed to touch the devices. If it were working great, there wouldn’t be a restriction and as I pointed out here, there are many challenges with Windows on ARM.

  • Updates: Every operating system and apps have updates and for good reasons, namely security and bug fixes. What is unknown with Windows 8 is the size and frequency of updates. We all know that the current pace and method of Microsoft updates is unacceptable in the modern world, and if it continues at its current pace, will detract from the tablet experience. The first day after I installed Windows 8 CP and got my system ready for desktop use, I received 34 updates; 4 for Windows 8 and 32 for Office. It took over an hour and that’s unacceptable in a modern, tablet world.

  • Tablet Games: I was very impressed with Pinball FX, but one game make not a trend. Given games are the most popular iOS and Android app category, I would have expected more by now.

  • Metro SkyDrive: I have used SkyDrive and Live Mesh for many years but primarily use Dropbox and SugarSync. There are two main issues I have found. First, I can see no more than 14 icons on an 11″ tablet display and there isn’t search capability. Sorry, consumers don’t like to create file folders nor do they manage them tightly. I am expecting Microsoft to change this or it renders SkyDrive useless.

  • Number of relevant apps: Certainly this will grow given Microsoft’s big bet and investment into developers but I was expecting more apps 6 months after Visual Studio was shown at the BUILD conference. 15 games and 3 social media apps 6 months after the developer preview isn’t the progress I expected.

  • Tablet OS footprint: The size of the final tablet installation is unknown, but if it’s more than a few GB, this will be a cost issue for tablets. Hard drives are “free” on desktops, but on SSD-based tablets, it’s a premium. The current download size for Win8 CP is between 2.5GB and 3.3GB, but those then get “unpacked” and increase in size. Microsoft is recommending 16GB free space for 32-bit and 20GB for 64-bit so the reality is the build will be between the download and the recommendations. Keep your eye on this one….

  • Tablet battery life: Microsoft and its partners have made a tremendous effort to improve battery life. Early indications show that by re-architecting the ways drivers work and BIOS work, using Metro as the front-end user experience, and by leveraging the lowest power ARM and X86, battery life will be competitive. I expect battery life to be competitive, but less than iOS or Android devices; but then again, it does more and I believe that it won’t become a consumer issue.

Experiential Improvements Needed

  • Too many bugs: Yes this is preview, but I was surprised to see this far into the development process the amount of application “hangs” with Metro apps like Mail, SkyDrive, and Photos. I experienced many situations where the screen just sat there in one color as if it were waiting for something. I used Microsoft’s recommended hardware tablet platform so that cannot be the issue.

  • Universal email inbox: The Metro Mail application doesn’t support a universal inbox. This is just basic and is surprising a feature complete preview launched without one.

  • MS Office file format viewers: Unlike iOS, OSX, and Android, the Win8 CP doesn’t include local viewers for MS Office documents. But it does support viewing PDF files.. huh? Click on a Word doc and you get sent to online SkyDrive where you can view and even edit a document. I see why Microsoft would want this as it “motivates” you to buy Office, but with all of the competition providing this, it really messes up the experience. The Windows 8 on ARM systems do contain Office but it isn’t clear what will ship on X86 systems. For the user’s sake, we can only hope that OEMs install at least viewers or Office Student Edition.

  • Metro Windows Explorer: Sorry, the newly designed Explorer doesn’t cut it in a touch environment. Even on an 11” display, it’s just too easy to click on the wrong icon or accidentally delete or move a file.

  • Metro Internet Explorer bookmark folders: Even Apple fought against but finally learned on iOS that for a browser to be usable, it needs an easy way to file bookmarks. And that means folders. 50 bookmarks strewn all over the place is just a mess and will repel users.

Conclusions

Windows 8 Consumer Preview builds upon the Developer Preview by adding application previews and cloud connectivity.  Windows 8 for consumer tablets is very distinctive in that it can effectively be used as a tablet device for “lean-back” usage models and for “lean-forward” usages when docked in desktop mode. Like Android, Windows 8 takes a content-first approach, albeit with much more beauty and style, and simplifies user’s interactions between different local and cloud-based services.

Unlike iOS, Windows 8 is “alive” and vibrant with its live tiles, white space, and over-sized imagery. When launched it will pose a serious threat to high-end Android tablets and will help thwart competitive threats on the desktop by Android, iOS (in convertible form), and even OSX. The biggest challenge I see is Microsoft’s and its partner’s ability to hit the 2012 holiday selling season with a stable operating system for tablets to compete with the iPad. That risk is being mitigated with special image loads for specific devices, but given the state of the Windows 8 CP experience, hitting holiday 2012 with the experience Microsoft envisions and must deliver will be a tremendous challenge.  I believe it is a bridge too far and the experience will suffer at the need to hit the holiday selling season.

The iPad 3’s Impact on the Industry

iPad event invitationApple finally made it official yesterday: The third-generation iPad will be unveiled at an event in San Francisco on  March 7. (Score one for The Loop’s Jim Dalrymple, who departed from the conventional wisdom and predicted an announcement on Wednesday, not the traditional Tuesday.)

I’m not going to indulge in guessing about the details of the announcement. Others will supply plenty of that. Within minutes of the invitations going out, tech blogs were buzzing about the significance of what might or might not be a higher-resolution iPad display. But even without knowing the details of the new iPad–which I will call the iPad 3 even though Apple may not–it’s possible to assess some of its impact on the industry.

The tablet market. Simply put, the new iPad should insure Apple’s continued dominance of the market, with Amazon and Barnes & Noble, with their ebook-oriented specialty tablets remaining the only other players enjoying any success.  Samsung and the other Android tablet makers were unable to make any real gains on the iPad during the year and half that the iPad has been standing pat. Now Apple is leaping ahead while the competition is still struggling to catch up to where the competition was. Apple may make things even worse by keeping the iPad 2 in the product mix as a lower-cost alternative. The wild card in the mix is the forthcoming tablets running Microsoft Windows 8. Even with the release of a consumer preview of Windows 8 hours away (as I write this), there are still more questions than answers about the tablet version.

The Android model. New software features of the iPad 3 that are not dependent on new hardware will be available on old iPads, and, where applicable, iPhones, on the day of launch. This makes the Android approach, where software updates are at the discretion of OEMs and carriers, look worse than ever. This week, manufacturers announced new Android tablets and phones running old versions of the operating system, with upgrades to the current Ice Cream Sandwich version promised  for the vague future. All too often in the past, those updates have never materialized.  Google’s inability to manage the Android upgrade process is the platform’s greatest failure and a key reason why its  numerical dominance has failed to turn into true industry leadership.

The personal cloud. Recent Apple announcement, particularly the iPhone 4s and Mountain Lion, have been characterized by an ever-deeper integration of devices with iCloud. So far, this has been mostly a win-win for Apple and its customers. Consumers gain convenient services, while Apple ties them ever more tightly into its ecosystem.

Carriers. Carriers who have built out LTE networks–Verizon wireless and AT&T in the U.S.–need traffic and an LTE iPad, assuming the new version is so equipped, will certainly be able to provide it. The key  question is pricing. The current 3G plans, $50 a month for 5 GB (Verizon has a 100 GB offering for $80) are too expensive, but carriers aren’t anxious to encourage extra 3G traffic on crowded networks, but LTE is another story. Apple struck a groundbreaking deal for no-contract service for the original iPad. It will be interesting to see if similar creativity accompanies the iPad 3 announcement.

 

 

You Can Never Have Enough Tablets

One of the things my firm focuses on is spotting trends within the technology industry. As a part of our constant search for trends we employ a concept we call “live the future now.” What this means, is that we as trend analysts, ourselves being early adopters, attempt to look for and implement things into our own work, play, family, life, etc, that we believe consumers may use technology for in the future. We also hunt out and study other people or groups of people, mostly early adopters, who are also using technology today the way we believe the masses will in the future.

So this column is going to be more about the future than the present.
Because I live and breathe this industry I also acquire quite a lot of technological gadgets as a part of this process. For the past six month’s I have been utilizing in different capacities no less than five and upwards of eight tablets at any given time all throughout my house. Not all my tablets are running the same core OS as some are iPads, some run Android and one runs Web OS. This helps me evaluate the strengths and weaknesses of a range of tablet operating systems and device features. Regardless of the OS I basically keep a tablet in every room of my house, except the bathroom, at all times. In basically every room where we spend significant time you will find a tablet of some shape or form. Living with a tablet in every room of my house is a fascinating experience. It is also a very convenient experience.

In the future I believe having access to these “smart connected screens” in every room will be a staple of most consumers’ homes in the developed world. What this enables is a situation where consumers don’t need to carry their tablets with them from room to room. They simply move to each room and as necessary, at their convenience, pick up the closest tablet and begin using it.

In my own experience doing this, I found that quite often I simply wanted to look something up on the Internet. What I looked for was the most convenient screen to access the Internet with. My notebook is rarely near me on the couch or bed and my smart phone suffices but the screen is a little to small for the job most times. This is where tablets come in. They are more mobile than notebooks and sport bigger screens than smart phones. And when you have one in every room you don’t have to think about bringing your tablet with you or where you left it last. Having a tablet in every room ready to be picked up and utilized was not only extremely convenient it was also extremely useful.

Now in this reality we must recognize that we may potentially shift from tablets being mainly personal computing devices to perhaps more communal computing devices–at least in the home environment.

Shift from Personal to Communal Screens
With the role of the personal cloud, I can see a situation where you just pick up the most convenient tablet/screen to your proximity, in whatever room you happen to be, log in to your personal cloud, and instantly the tablet becomes “your tablet.” It would contain all your personal settings, preferences, access to media, etc.

In this environment what is personal is your cloud not the device itself. This is a different take on the concept of personal computing. This of course does not mean that we consumers will not own personal computing devices, like smart phones for example, but that there will also be screens we use in our daily lives that are not personal but more communal. The personal cloud we subscribe to is what turns any screen into our personal computing platform for the amount of time we choose to use that screen as such.

Google’s Chrome OS is very similar in concept to what I am outlaying. Any person who has a Google account and has invested in the Chrome OS, via a ChromeBook, could log into my or any ChromeBook and begin using the device as if it was their own. When this concept makes its way to tablets I believe it will enforce this idea of a screen agnostic tablet, in every room, future that I am outlining.

Now of course for this to happen the cost of tablets will have to come down. That is why I pointed out at the start of this column that I am talking more about the future than the present. However, what if someday we can sell a $99 or less tablet that runs a very light OS, with access to cloud services, and wi-fi? Another way this reality could happen is with a hardware-as-a-service model where as a part of a subscription, perhaps to your cable provider, the devices are provided for free.

The bottom line is that over the next five years the BOM cost of tablets will come down. If these devices rely more on the cloud than native software, some of the costs will move from the device to the service. Making the hardware more affordable as it relies more on a service to become “personal.”

It is with these types of “smart connected screens” that I believe we will see the explosion of devices into consumers homes. Prior to tablets we may have assumed that the dominant computing screen in consumers lives was going to be a notebook PC. In essence we would have said that there would be a notebook in every room, owned by every consumer. I think we are rapidly learning that, that future is going to be given to tablets.

OnLive Desktop Launches Super-fast Browsing for the iPad

One of the most interesting announcements at CES in January, OnLive Desktop, largely got lost in the noise of the annual gadget-fest in the desert. But this brainchild of online games wizard Steve Perlman is moving forward with an enhancement that brings superfast, full desktop browsing to the iPad.

Hulu screenshotOnLive desktop brings a Windows 7 virtual machine to the iPad. All of the code actually runs on servers in a data center; the tablet just displays screen images that are transmitted to it using the highly efficient adaptive algorithms that OnLine developed for its games service. The company is not quite ready to launch its $10-a-month Pro service that gives users a persistent Windows environment and the ability to add their own applications beyond Microsoft Word and Excel. As an intermediate step, it’s launching the $5 a month OnLive Desk Plus, which adds Internet Explorer to the base apps.

And what a browsing experience it is. It’s full desktop IE, free of all the restrictions of iPad Safari, as shown in the Flash-based Hulu.com image on the left. That look like a Windows desktop, but it is actually an iPad screenshot. If you;ve longs for Flash sites that have yet been turned into iOS-friendly apps, OnDesk Live Plus is your answer.

Not only does Flash play without the stuttering common on those mobile device that claim to handle the format, browsing is extremely fast.  Even the notoriously slow loading page of Washingtonpost.com came up nearly instantly. The reason for this is simple.  You are using a data center’s very fast internet connection. The impact is shown in the speed test screenshot below:

 

Of course, there is a fly in this ointment. You’re still running the mouse-and-keyboard centric Windows 7 on a tablet. Every time I need to use Microsoft’s onscreen keyboard, I wonder how a serious software company can force this decade-old monstrosity on users five years after Apple showed us how it is supposed to be done. Apple offers a context-sensitive keyboard that always has just the keys you need for the task at hand and generally appears and disappears on its own as needed. Windows depends on a keyboard that slavishly copies a desktop design and that must constantly be launched and stowed manually. If you’re going to do any serious amount of typing, you’ll want a hardware keyboard, but even that doesn’t solve the missing mouse problem and the difficulty of navigating Microsoft’s touch-hostile menus with your fingers.

As a result of  Windows 7 touch deficiencies, I don;t think OnLive Desktop will really come into its own until Windows 8 (assuming that Microsoft delivers on its promise to make Win 8 work well with touch. Then you will be able to run full-fledge Office and other Windows applications as well on a tablet, an opportunity that will be very significant in the Office-dependent enterprise. If I were Citrix, I would be very worried.

Apple Rumors: Separating the Probable from the Impossible

Drawing from Apple fuel cell patent application.
Drawing from Apple fuel cell patent application.

It’s silly season again in Apple-land. As usual the company is holding off on an announcement of its next announcement until the last-minute, but there’s a general consensus in the tech world that Tim Cook will unveil the next version of the iPad the first week in March.

I don’t know what Apple is going to announce. Neither does anyone else who is writing about it. But that doesn’t stop anyone, a the rumors can be expected to reach fever pitch in the next couple of weeks. Here are some handy rules for making sense of the Apple rumor machine.

 

  • Consider the source. Apple has a long history of feeding product leaks to The Wall Street Journal. So I take today’s report that the new iPad will include 4G LTE wireless more seriously than most. Stories based on reports in Taiwan’s Digitimes, which bases its predictions on vague rumblings in the Asian supply chain, not so much. Analysts’ predictions are particularly suspect. Piper Jaffray’s Gene Munster has been predicting the imminent arrival of an Apple television for years. Some day he’ll be right.
  • A prototype is not a product. Another WSJ report says Apple has been testing an iPad with an 8″ display in Asia. I don’t doubt that this story is correct, but just because they are testing it doesn’t mean it will make it to market. Prototyping is very expensive and for most companies, the existence of prototypes is tantamount to a product announcement. But Apple has $100 billion in the bank. It can afford to prototype anything it damn well pleases without any commitment to production. Maybe Apple will do a smaller iPad; maybe they won’t, but the fact that there may be a prototype out there doesn’t say much, one way or the other.
  • A patent really isn’t a product. Apple employes a lot of really smart, creative people and they come up with a lot of interesting ideas. Like most companies with a lot of money, Apple will file for a patent on anything that is novel and looks potentially useful. And since patent filings become public after 18 months, they are one of the very few windows into Apple’s secretive product development process. But only a small percentage of patents ever make it into products. And patent lawyers are very good at writing applications that obscure what an invention might be good for. So don’t hold your breath waiting for an iPhone powered by the hydrogen fuel cell revealed in a December Apple patent disclosure (drawing above).
  • Does it make sense? For several years, we were treated to regular rumors about an iPhone “nano.” Supposedly, Apple was going to come out with a smaller, cheaper version of its iconic phone. No one ever bothered to explain what the advantage of a smaller iPhone might be, especially at a time when the competition, such as it is, was steadily growing bigger. No one bothered to explain how a smaller iPhone could cost significantly less without compromising the user experience (a smaller display alone would save very little, and might even cost more.) With android phones soaring to 5″ plus, the iPhone nano rumors seems to have finally died out, but I expect to start hearing reports of a bigger iPhone this summer any time now. Don’t believe those either.

    •  

  • Don’t trust “confirmation.” Once a upon a time, if a publication reported that a report had been confirmed, it meant that someone in an official capacity and with authority to do so had said it was correct. In gadget blogs, however, confirmation simply means that a rumor has cropped up somewhere else. More likely than not, it’s the original rumor eating its tail like an ouroburos. Unless the confirmation comes from someone like Tim Cook, Scott Forstall, Phil Schiller, or Eddie Cue, pay no attention.
  • Consider the timing. Once Apple announces that it will have an announcement, the nature of the rumors changes dramatically. The reports get much more focused and much more believable. By the time Cook and friends get up on stage, everyone in the room has a pretty good idea of the details of the announcement. Partly this is because as the event nears, the circle of people informed necessarily gets wider and begins to include significant numbers of business partners and other outsiders. Secrecy gets very hard to maintain. And Apple, which is as good at managing expectations as anyone in the business, does its own strategic leaking.  So the reports you hears within a week or two of an Apple announcement are much more likely to be true. But still, there is almost always a significant surprise or two that doesn’t leak out.

Future iPads Will Cannibalize TVs

As ZDNet’s Adrian Kingsley-Hughes points out, we know absolutely “nothing” about the iPad 3 right now.  While pontificating about future Apple products is a lot of fun, drives many page views and makes web site editors very happy, it’s  just a pontification factory.  At some point in the near future, the iPad will have a better display and will be lighter than its predecessors, which drives me to the conclusion that the next generations of the iPad will start to rapidly cannibalize HDTVs, particularly second or third sets. I’d like to share my thoughts on why this will happen.

 Consumers Radically Changing TV Viewing Habits

I have done a lot of consumer research and have been tracking PC use in the living room for years.  Around 10 years ago, outside the very tech savvy, users started augmenting their TV viewing experience with a notebook PC.  The early majority pecked away at their notebooks as the rest of the family watched something the early majority somewhat ignored.  This model then transitioned into family members watching shows that were on the major broadcaster’s web sites.  Remember when Big Brother started providing live PC feeds?  This model quickly was augmented by Hulu and Netflix diving into the market as an intermediary.  The iPad followed which provided very simple, manicured apps that gave access to rich “TV” content from Netflix, Hulu, and even cable companies like Time Warner and Comcast.

These viewing habits drove a wedge between two distinctly usages; personal and group viewing. Mobile devices like the iPad and their services enabled growth of personal viewing and consumers could watch finer slices of what they wanted to watch, when and where they wanted.

Group viewing isn’t going away any time soon, but as more people spend time on personal viewing, group viewing declines.  They only exception is “crossover” viewing where a family member is wearing headphones watching another show on a mobile device while other family/dorm members are watching on the HDTV.  Regardless of the viewing model, it drives the need more personal viewing devices and less group devices, or certainly drives the behavior to prioritize personal over group.

Consumers are changing their viewing habits from group to personal, but will future iPads be up to the task in terms of video and weight?

Future iPad Display as Good as Watching a 75″ HDTV?

No one publicly knows the iPad 3 resolution for sure, but let’s assume that the lines are doubled horizontally and vertically to provide a “2K” (2,048×1,536) resolution which provides 4X the resolution of the current.   I will also assume that content will come in three flavors: 1) upressed to 2K by the iPad, 2) services provide upressed 2K content, and 3) in special cases iTunes will provide native 2K content.  Net-net there will be video content that can take advantage of the new and higher resolution.

Most people watch iPad video content between 12″ and 16″ from their eyes depending on if they’re in bed or sitting on a couch. Assuming the iPad 3 is 2K, the visual experience would be similar  to watching a 75″ HDTV at 10′.  Users vary in terms of visual acuity and even neck length, but mathematically the numbers are accurate and make sense.  The farther the TV is away from the user, the larger it must be to compensate for the distance is away from the user.  Future iPads will provide a similar video experience as a huge HDTV.

Weight is a Deal-breaker

Many I discuss this with argue that the iPad 2 is light enough to replace much of the TV viewing.  There aren’t “standards” that dictate this, but from doing primary research with consumers, there are products that more comfortably enable someone to comfortable hold a device for hours and stare at it comfortably.  The Amazon Kindle DX2 at 18.9 ounces (1.18 lbs.) is the closer to right form factor and weight to be held comfortably in bed or on a couch.  If you have ever watched a show on an iPad 2 at 1.325 lbs. in the bed, you know exactly what I am talking about.  After a while, you wish the iPad would just float so you didn’t have to touch it.  Or you find a way to rig the stand so that you can lay on your side without touching it.  To effectively replace a TV, future iPads must be significantly lighter to effectively replace personal TV viewing.

5 iPads for the Price of One HDTV

Consumers have an amazing way of rationalizing cool electronics they want to buy.  Most consumers use their heart over their head when making an electronics purchase and I can see users rationalizing buying multiple iPads instead of placing their investment into a TV. If Apple were to go after the secondary TV market with vengeance, I could see the consumer rationalism going like this…. “Hmmmm…. I can buy 5 iPads for the price of  one high quality 60″ TV.  And everyone in the family would have them.  I will be the hero of the family in that everyone gets an iPad where they watch what they want to watch and do all the other great iPad things. And, when we want to watch the big game together, we can watch the older, but good enough 50″ we bought 5 years ago.”  This is human rationalization at work and happens every day in consumer electronics.

Siri Will Push Consumers Over the Edge

I’m not going out on a limb when I say I believe Apple will integrate Siri into future iPads.  The stronger commitment I think they will make is to an entertainment dictionary and natural language capability.  As I wrote last September on the fabled “iTV”,  instead of popping between Netflix, Hulu+, YouTube, iTunes and TWC TV, I believe Apple will aggregate and index this “channel” content into Siri to provide a one-stop touch and voice enabled experience. In this way, the users can say “find Revenge” and Siri will scan across all of the registered sources and look for re-runs, live or taped versions of “Revenge”, regardless of the source.  This is the ultimate remote controls in our world where there are a 1,000s of “channels” available.

This will serve as the final consumer rationalization point they need to make the tradeoff between a new TV or iPad.

Holiday 2012 Will Provide a Directional Indicator

With 3D an unmitigated flop in TVs and flat panel saturation becoming a reality, the TV industry is banking on “Smart TV” to pull it out of the hole in 2012.  As I’ve written previously, TVs won’t be very smart in 2012 when it comes to advanced user interface and they aren’t bringing anything else to the table to motivate consumers to replace their old HDTV.  What is new is a shiny new iPad with much higher resolution than their TV and the best entertainment remote control interface at a dramatically lower price than a new TV.  I believe the future iPad will take a big chunk of the secondary TV and even delay new primary TV purposes through consumer rationalization that it can serve as the primary “personal TV” device and I expect to start to see the effects in the holiday 2012 selling season.

Do Apple Competitors Make Bad Products?

I often engage in discussions with the financial community on matters related to tech for their portfolio management. One of the things I was asked in a recent conversation intrigued me. The question was around why Apple seems to be dominating their competition with such a limited product portfolio mix.

Tim Cook continues to emphasize with each investor, earnings, and public event that Apple’s laser focus is to continue striving to make the best products on the planet. Given that Apple seems nearly unstoppable, it appears their strategy is working. And it does make you wonder what Tim Cook’s statements about Apple continuing to focus on making the best products and Apple’s dominant position (especially with iPhone and iPad) says about other products on the market.

So the question thrown at me was “Do Apple Competitors Make Bad Products?” In light of Apple’s continual progress forward and other companies’ struggle to keep up, this is an interesting question. The answer is simply that many Apple competitors make very good products. I happen to like quite a few of them. The problem—for competitors—is that Apple makes exceptional products and perhaps more importantly, extraordinary experiences with those products.

To dive into this deeper, three fundamental points need to be established…

Apple Has More Competition Than Anyone—Yet No True Competitors

When you think about Apple’s vertically integrated business strategy of having a dedicated hardware business, software business, and services business, you realize that Apple competes toe-to-toe with almost the entire tech industry. Yet no company competes toe-to-toe with Apple.

What I mean by that is Apple competes directly with hardware companies, meaning people who make notebooks, desktops, all-in-ones, smartphones, tablets, and set-top boxes to a degree.

They also compete with those who make software, particularly in operating systems, but also in core apps. They compete with Microsoft at an OS level and at an Office level with Pages, Keynote, Numbers, etc. They compete with companies who make media management and creation software like Adobe, or ArcSoft etc, with iMovie, iPhoto, etc. They compete with Google with Android. The list could go on.

They also compete with services companies. iTunes and iCloud as a service competes with a host of online services providers from email, to calendar, to movies, music, storage and backup etc. Google and Microsoft again are competitors here along with a long list of others.

They compete to a degree with retailers. Apple retail competes with Best Buy, Wal-Mart, Target, Staples, etc. Note that Apple doesn’t compete on all levels with these retailers, but we have to acknowledge there are some crossovers.

When you look at the sum of their businesses, because of their vertically integrated strategy, it is not quite obvious the large list of competitors Apple has all over the industry. Yet the reality is that no other company has such a tightly integrated vertical strategy as Apple. So my first point is that at a fundamental level, Apple doesn’t actually have any true competitors who compete with them on every level they way they do with the rest of the Industry. This, at its core, is what sets them apart.

Granted we could debate that with Google’s acquisition of Motorola, they have all the parts on paper to compete with Apple toe-to-toe, but for the time being I still consider that a stretch.

Apple’s “Works Better Together” Philosophy

What is truly unique about Apple is the relationship that all their products have with each other. It is as if each product was made for the other, yet alone each one is still a solid standalone product. We call this the “Works Better Together” approach. It means that your products or “consumer end-points” can work fine as standalone products, but work even better as a comprehensive whole. In concept this sounds like a no-brainer, but the reality is that Apple’s vertically integrated approach is essential in executing this strategy.

Too many companies who make consumer products organize their business units to compete for PNL. Sometimes even worse than competing for PNL, they work as a silos and never have a clue what the other business groups are working on. This makes it extremely difficult for a company to create a “works better together” portfolio even if they have all the parts to make it work.

By developing this strategy as a part of the “iDevice” ecosystem, Apple benefits by creating a user experience that is not related to simply one device, but to the entire Apple ecosystem. This and more is what we mean when we talk about the Apple ecosystem being sticky and creating consumer loyalty.

Technology as Art

Lastly, Apple has a culture that is completely unique, which is another part of the reason for its success. Steve Jobs in his many keynotes has pointed out that Apple’s approach to products is that they are at the union of liberal arts and technology. And nobody in the industry so far has been able to match Apple’s eye for design.

What this means is that there is an added dimension of design and technology as art that influences the thinking of those who work at Apple. This group is like a passionate team of artists who happen to turn their art into technology.

This is the major reason that Apple emphasizes simplicity. Steve Jobs has in many keynotes and demos said that Apple’s various products “just work.” What we must not forget is that creating technology products that are simple is no trivial task. Simple solutions require sophisticated technologies. Apple knows this better than anyone and it has oriented itself to succeed at just that.

So it is not that Apple competitors make bad products. Their hardware competitors and OS competitors make good products. It is simply because of their vertically integrated model, paired with a works better together product philosophy, coupled with incredible execution, and a hardware as art design strategy, that Apple simply makes exceptional and extraordinary products.

Which is why one can argue that they truly do not have any real competitors.

The Tablet is the Ultimate Mobile Personal Computer

Our firm has been doing an extensive amount of tablet analysis over the past year. The more I study the role of the tablet in the industry and in the lives of consumers the more fascinated I become with this form factor. To clarify, we believe and classify the tablet as a PC. We simply view it as a form factor within the PC landscape.

One theme of late that has some of my mind share is around tablets going where traditional PCs can not. I am not just speaking of overall market share, although that factors into my thinking, but rather I am thinking about location. Now to be clear, I am not saying PCs (clamshell notebook PCs specifically) literally can not go to the locations I will talk about. Rather, what I want to point out is that the traditional PC/Notebook PC is the wrong form factor for a growing number of use cases and market pain points.

Prior to tablets, I believe the technology industry at large looked at nearly every consumer use case, as well as every vertical market, as an opportunity for the sale of a traditional PC/Notebook PC. What this led to was the adoption of the traditional PC into scenarios, where although sufficient, was the wrong form factor for the job. If you follow much of what I write you will notice that I am fond of Clayton Christensen’s philosophy in The Innovators Dilemma that consumers “hire” products to get jobs done. Prior to tablets the market “hired” the PC to do jobs that we are now finding tablets are better suited to do.

Last week I looked at the adoption of the iPad by a growing number of enterprises for specific mobile workforces like field force and sales force automation. In many business related scenarios we are seeing the iPad step in and take the place of notebook PCs primarily because it is better suited for the specific task at hand. Enterprises are finding that for their most mobile workers the iPad is a better tool for the job than a clamshell notebook.

Late last year I wrote in my TabTimes column about how small businesses are using iPads for things like point of sale retail and even mounting an iPad for interactive product/ media placement. I even talked about some examples where restaurant owners were going digital and integrating iPads for the uses of taking orders, showing pictures of menu items to customers, and adding other relevant information for customers to make dining decisions. In both those later use cases the job could have never been solved by a traditional clamshell PC because who wants to hang that device to the wall at retail or walk around a restaurant holding a clamshell notebook? This is at its core what I mean when I say that tablets will go where PCs can not. This is what I mean when I say that the tablet is the ultimate mobile PC.

Further to this point, I highlighted yesterday in an article how the iPad makes the perfect learning companion. I have been very vocal about how touch computing removes barriers to computing presented by mouse and keyboards and therefore are better tools for learning for all ages but kids specifically. We have been using PCs in the classroom because they were the only tools available. Now there is a better tool, the iPad, and it will find itself fitting into educational environments better than the PC ever could.

The list goes on from legal firms, to financial management firms, to hospitals and doctors, pilots and airlines, public safety, and more, who are all finding that the iPad is better suited than a clamshell PC for their specific computing needs. Consumers are waking up to this reality as well.

Although, the notebook PC is portable you don’t typically see consumers move around, walk around, or stand up and use their notebook. This is because the form factor lends itself to a desk or a lap where the screen sits at arm’s length away. Tablets are very different. Consumers are comfortable using them while standing, walking, sitting on the couch, laying in bed, in the bathroom, by the pool, at the beach, in the kitchen, etc. The tablet is not designed to be viewed at arm’s length and because of that our relationship with this form factor changes. We can use it in different ways and more importantly take it places we would not or could not take our clamshell PCs.

I would argue the tablet form factor lends itself to more mobile computing use cases than a clamshell notebook. Because when consumers use a clamshell notebook they are not truly mobile–they are stationary. Whereas one can actually use a tablet and truly be mobile. I know I am tweaking slightly the classically held definition of mobile computing. However, due to the nature of tablets impact on the market I believe the traditionally held definition of mobile computing needs to be challenged.

The PC, tablet, smart phone, and perhaps something new down the line, are all tools to get jobs done. Each one has its place and each will remain relevant in some way shape or form. However, when it comes to mobility the tablet is mobile computing in its purest form.

The iPad: The Perfect Learning Companion

If we are honest with ourselves we have to admit that our country’s educational system has some serious fundamental issues. Our educational infrastructure is ranked 23rd in the world and seems like it declines even more every passing year. For a country that has always prided itself on progress our educational system has progressed very little. Apple and the iPad could stand a chance to change all of that. If the powers that be are smart, they would jump on the iPad bandwagon and begin integrating it at every level–especially elementary school.

Credit - OnlineEducation.net

I came across a recent info-graphic from the folks at OnlineEducation.net which visualizes quite a bit of good data about the state of US education. The graphic shows the bad and then presents some of the hopeful points from successful iPad trials in schools. The most encouraging statistic so far shares that through multimedia platforms student interest and retention goes up 25%. I encourage you to check out the full info-graphic here.

As much as I believe the iPad, and tablets in general, present one of the most exciting advancements for education in some time integrating it successfully will not be easy. For this to work, the system has to change and we need to begin to think more creatively about how we educate our youth.

One of the most important and fundamental principles that has at least been acknowledged over the past 20 years is that not everyone learns the same way. My 8-year-old, for example, has no problem learning through repetition and busy work. For her the system works. There are of course ways the system can develop and be more effective even for her learning style but the point is it works. For my youngest, who is now seven, the system does not work. She learns very differently, she learns through interaction and engagement, needs more hands on work filled with examples, and more importantly (just like me) she learns through trial and error most effectively. She gets frustrated with the current systems process but that doesn’t change the fact that she is hungry to learn. She simply needs a better tool. She is not alone.

That is why I have been integrating the iPad into both their learning processes since it first came out. That is why I stated in a previous column, as well as in my TIME column, that I believe the iPad is one of the best investments in a child’s future. You can choose to agree with me or not.

As I stated earlier, the system needs to be reformed. The iPad, and technology in general, present the best opportunity at a fundamental level to re-build our current system. It won’t be easy but there are several keys required for this to work.

Integrate Technology Early
Getting kids started early with technology is key. We want them to be comfortable and embrace technology as a part of their lives. This doesn’t mean they need to be entertained in order to learn but rather technology presents a way for them to engage with what they are learning in ways not possible before.

As we understand and experiment with how best to integrate things like the iPad into the classroom, we will make progress in better understanding the right approach and educational philosophy. The key is not for educators to be afraid of this change but to embrace the iPad as a new tool in their toolbox to better lay learning fundamentals and prepare our kids for the future.

We Need New Software
The second thing that needs to happen is dedicated software or apps for teachers and kids at every learning level. We are constantly taking steps in this direction but the software development community has yet to fully catch on and take this category as seriously as they should.

What we need is something akin to a fund, whether a specialized VC fund or government grant fund, to encourage our best and brightest software developers to use their talents and invest not just in gaming apps but education apps as well.

Apple Needs to Lead
Apple has taken a leadership position with the iPad and we need them to do so with their educational strategy as well. Luckily this is exactly what they are doing. This section of their website is dedicated to providing resources and education on using the iPad in education.

Apple is continuing to develop a dedicated ecosystem around the iPad and education. iBooks Author and iTunes U are good examples of Apple continuing to invest and focus on this area. As Apple actively engages the academic community, I hope we continue to see a mass of quality multi-touch textbooks as well as educational apps for every subject at every learning level.

The one area I would personally like to see more progress is in the app curating part of the iTunes App Store. There are so many apps that “app shopping” can become a burden. Apple already curates some areas of this with their “Apps For” categories. It would be great to see a more expansive curating process for education like breaking out apps for learning by age, or subject, or topical interest.

Teaching Teachers
Lastly, we need to teach our teaches as well about the benefits of using technology and specifically the iPad in the classroom. My wife is a teacher, and she like many of her friends who are teachers, needs a little help when it comes to technology. Generally speaking, they are not the tip of the early adopter iceberg.

Along those lines having courses at the college level or as a part of the teaching credential process on using things like the iPad would be extremely helpful. I assume that over time this will happen but hopefully it happens sooner than later.

Our teachers are valuable assets to this nation. Empowering them with the right tools to educate and encourage our youth is a legacy the technology industry needs to focus on.

For further interesting reading I encourage you to check out this online Ning social forum that was created for teachers to share stories and leaning experiences on using iPad in the classroom. http://ipadeducators.ning.com/

Apple’s Enterprise Invasion: Why Winning in Consumer Means Winning in Enterprise

There used to be a time when I would go to tech industry events, trade shows, internal company meetings, etc. and I was one of the few in the room with a Mac. I took great pride in that fact, but now the Mac is gaining everywhere. It’s in schools, hospitals, labs, construction sites, restaurants, consumers’ homes, coffee shops, and now increasingly in the enterprise.

With this observation in mind it should come as no shock that Apple blew the doors off their latest earnings and recorded all time sales of Macs. My analyst colleague, Frank Gillet at Forester, shared his research which showed that 1 in 5 Global workers now use an Apple product for work.

So what is fueling this trend?

Apple Products Cost Less to Support

When I worked at Cypress Semiconductor, I moon-lighted from time to time and helped our IT department by solving Windows problems. I prided myself on the fact that I could troubleshoot Windows with the best of them. I could navigate my way in and out of all of the different and common Windows conflicts. Then a funny thing happened. I switched to the Mac and all of a sudden troubleshooting became a thing of the past. That reality is now hitting the enterprise IT departments.

A recent survey by the Enterprise Device Alliance which surveyed IT professionals in large enterprise environments that have a mix of Macs and PCs overwhelmingly found agreement with IT managers that Macs cost less than PCs to support. IT managers noted that Macs presented higher up front acquisition costs, but also noted that the long-term benefits were worth the tradeoff.

When it came to Mac adoption in the enterprise, ease of technical support and lower total cost of ownership were among the top reasons for the switch. Number one on their list–employee preference.

Bring Your Own Device To Work

If you follow this industry even a little bit you keep hearing about the “consumer-ization of IT” or the “Bring Your Own Device” trend. Yes, both trends are real and IT managers are diligently working to allow employees to use whatever devices they want at work.

We recently interviewed SAP’s CIO Oliver Bussman. He shared with us that inside SAP they have 14,000 iPads and 8,000 iPhones deployed. That is a total of 22,000 iOS devices compared to the 20,000 Blackberries deployed to his workers. SAP, like many other companies is working to cater to their employees’ device preference. And Mr Bussman shared an interesting perspective with us. He said that he now has to pay closer attention to what is going on in the consumer market because if he doesn’t, he would not be able to stay ahead of the game. His workers use and learn how to make things like the iPad work for them at home. Then they come to him and say they want to use it in the office as well. After his visit to CES, Mr. Bussman recorded a video of his thoughts on the consumer-ization of IT and it is worth watching as he has a very important perspective on the subject.

The Right Product for the Right Job

In the construction industry they say that “every job is easier with the right tools.” Perhaps for too long, due to the Windows monopoly on most businesses, IT managers have been forced to have workers use the same tool to get a multitude of jobs done. But now devices like the iPhone and iPad in particular are proving more effective in many situations like field force and sales force automation.

During our interview Oliver Bussman also shared with us that he was able to deploy 300 iPads to his global sales team in just 4 weeks. In many enterprise solutions, the iPad, and touch computing in general, is just a better tool for the job.

IT managers need to effectively empower their workforce to be productive and equipped with the tools they need to be successful. Apple products are now becoming a critical part of the enterprise tool set.

Apple’s focus has not been the corporate IT accounts. Apple has always been a consumer product company waiting for a pure consumer market to mature. Now that the consumer market for personal electronics has matured, it appears to also be an enterprise strategy. Demand for Apple products is at an all-time high with consumers and their latest earnings prove this. What no one really could have predicted was that to win in enterprise you had to also win in consumer. It seems logical, but hindsight is 20/20. That reality is now fueling growth in Apple’s favor from every corner of the technology sector. The scary thing for Apple competitors is that they are just getting started.

Apple Just Re-Invented Books

This morning’s announcement from Apple about creating tools for interactive textbooks is actually a landmark announcement for four major reasons.

The first is how these tools can impact education. Ben wrote a good piece on this so I won’t elaborate on this too much here, other than to say that these tools will completely re-define how textbooks can be created and distributed. It is ideal for higher Ed textbooks but Apple and their major publishing partners are even doing high school level interactive books that should push iPads into education circles even faster.

Related Columns: Why the iPad is an Investment in your Child’s Future

The second thing iBook Author does is lay the groundwork for non-education publishers to create interactive eBooks as well. But, as Phil Schiller pointed out at the iBook 2 announcement event in NYC today, this tool can be used to create any book of any kind, not just interactive books. This free authoring tool is a major step towards making Apple not only a publisher in their own right but a distributor as well as delivering the hardware platform optimized for enhanced eBooks in general.

While the first push with these tools will be to educational authors, it won’t be long until mainstream authors start using these tools and use the iBookstore as their preferred distribution medium. And since these tools are so easy to use, authors who only write text-based content will begin playing with the integration of color drawings, illustrations and other media to enhance their story lines, which will only work properly on an iPad.

The third thing these tools do is give Apple a serious competitive advantage over other tablet vendors. The iPad is already the leading tablet, but by developing these rich authoring tools for creating interactive and enhanced eBooks for the iPad, it makes the iPad even more interesting to consumers and eBook readers from all angles. To date, Apple has sold about 70+ million iPads and we expect them to sell at least that many in 2012. This means that they are rapidly increasing their user base, which in turn becomes more attractive as an eBook publishing and distribution platform for all types of authors. This move really distances them from any other tablets on the market

But the 4th thing these tools could do is quite interesting. It has the potential of doing to the publishing industry what Apple did to the music industry. Although Apple did not invent the MP3 player, they re-invented it and then created the iTunes store, which with the iPod, became the # 1 vehicle for digital music distribution. Today, Apple owns 75-80% of the MP3 player market even though many others have tried to duplicate their success. But they created the iPod, the tools and the distribution medium for digital music that helped Apple own that market. Yes, music is now available on smartphones, but it took Apple’s competitors almost a decade to replicate their success and even then, it had to come on a completely different digital device.

Now Apple has a chance to re-invent eBooks by delivering a complete eco system of hardware, software development tools for creating next generation interactive eBooks, a publishing and distribution medium and a powerful hardware device for delivering this optimized content. On the surface this looks like a major move to get Apple more entrenched into the education market. But I see it as Apple’s first move to disrupt the entire publishing industry. If Apple’s does this properly, they could become the largest publisher and distributor of eBooks and in many ways, change the economics and overall distribution of eBooks in the future.

One more thing. If Apple was concerned about Amazon’s Kindle Fire and even Amazon’s role as a publisher and distributor of eBooks, they aren’t anymore. In fact, this is Apple’s response to the Kindle Fire and Amazon’s overall position as an eBook distributor. The key reason is that with these tools, Apple will completely raise the expectations of what should be in an eBook in the future by pushing the idea that all eBooks should have some type of rich interactive format that delivers an enhanced reading experience.

Of course, the Android or even Windows 8 tablet crowd could respond in kind, but at the very least, Apple has a two-year head start on them and given the competitors track record in trying to catch Apple that lead in this area could even be longer.

I also think that this probably signals that a lower cost iPad is on the way. For Apple to really get iPads into education and leverage this new interactive eBook development platform, they will need to have some models with lower prices. Given the tight budgets of schools and families who could really use something like this to help their kids education, iPads will need to be much more affordable if Apple is going to “own” this segment of the tablet market.

Why the iPad is an Investment in Your Child’s Future

Whether or not Apple uses this positioning, it is perhaps one of the best angles for the iPad. When friends, family, colleagues, or anyone who asks me, asks for my recommendation about iPad, I always add the benefit to kids – if they have them.

From the first iPad, and ever since, I have marveled at how my kids have taken to the iPad and more importantly how I have been able to use very helpful apps to assist in building critical skills. My kids both used the digital version of the popular “Bob Books” to help them prepare to read for kindergarten. I have been able to find apps at nearly every level of their education to let them engage more with relevant age-based subject matter.

I can say with conviction that the iPad has helped my kids learn to identify objects, colors, learn to read, build critical observational and critical thinking skills and more. This is not to say they could not have built these skills without the iPad, of course they could, only that the iPad has made the process more engaging, fun, and natural.

Touch Computing is the Future
When I was young, everyone was pushing to teach kids how to type as well as overall computer literacy. If you think about it, touch computing as well as things like the iPad in general, make computer literacy instant. My kids didn’t need to go sit through computer literacy classes to start using an iPad and begin computing. They picked it up and from day one used it to its full potential – for them. I would argue this is the case with any age group.

I have written extensively on the subject of touch computing, constantly highlighting its importance to our computing future. I believe touch represents the most natural computing paradigm, along with speech computing (which has not fully come to fruition). Touch breaks down traditional barriers to computing that a mouse and keyboard had traditionally created. Mouse and keyboard computing paradigms are still relevant, but have been designated to task specific usage.

Although touch computing is natural, exposing children to it at a young age will set their expectations for computing higher and potentially help create the next generation of leaders. Growing up with touch computing as the driving computer paradigm will lay an important base for our children’s future.

Related Columns Mentioned:
Why Tablets Represent the Future of Computing – at TIME.com
From Click to Touch – iPad and the Era of Touch Computing – At SlashGear.com

Re-Inventing The Book
Today Apple took that truth one step further with their announcement of iBooks 2 and the Author toolset. Today’s announcement on the surface is re-inventing the textbook and providing next generation publishing tool kits. It is however, quite a bit more. This announcement lays the foundation for the complete and total re-invention of books in general.

Up to this point, I have been disappointed with the publishing industries strategy to simply re-purpose books in e-reading form. Last year I wrote about the need to re-invent the book and to date it still hasn’t happened.

Hopefully with the toolkits Apple has developed and will continue to develop, publishers will get savvy and start being more creative with how they create package content. Which is essentially all a book is—the packaging of content. This packaging of content was limited to static words on a page, but with iPad the packaging of content is taken to a new level.

Publishers will get disrupted if they do not embrace this wholly and quickly. What is to stop smart people with a great idea to create the next era of interactive books? If the publishing industry is not careful, they could face the same fate as the music industry but perhaps to an even bigger extent.

Interactive books are the future and the iPad is the perfect platform for them to thrive. We will soon hopefully have not only next generation text books, but next generation children’s books, novels, graphic novels, biographies, and more.

For now, I intend to purchase these new interactive books for my kids and get them engaging with educational content. Since I truly do believe that having them use the iPad and integrating it into their educational routine is an investment in their future.

Related Columns Mentioned:
Re-Inventing the Book in the Digital Age – at SlashGear

Kindle Fire: The Most Divisive Product of 2011

A month after its launch, Amazon’s Kindle Fire continues to be an extraordinarily polarizing product. Lots of people like it and it appears to be flying off the shelves (though it would be nice if Amazon supplied some actual numbers to back up its glowing sales reports.) But a significant element of the tech world has nothing but contempt for the 7″ ereader/tablet.

Kindle Fire photo
Amazon's Kindle Fire

The split in opinion reflects an analytical division that has colored the debate since Amazon announced the Fire in September. Some folks see it as poor (if smaller and much cheaper) version of Apple’s iPad, while others view it as a more limited device dedicated to the consumption of Amazon content, particularly books.

The latest round of discussion was  triggered by a New York Times Business Day article by David Streitfield. The piece leaned heavily on criticisms by usability guru Jakob Nielsen of the Nielsen Norman Group, who declared: “I feel the Fire is going to be a failure.” But Nielsen is no great fan of the iPad  either. Though he has praised the hardware design, he has been sharply critical of both iPad apps and web sites optimized for the tablet. And his criticism of the Fire’s display of web pages in a bit odd, that pages designed for a 10″ display don’t work well on a 7″ screen. People who buy a Fire looking for a general-purposed web browser are going to be disappointed.

Streitfield’s article immediately inspired Fire defenders. In a post aptly titled “The Kindle Fire is a Kindle Killer, Not an iPad Killer–That’s Why It Works,” Search Engine Land’s Danny Sullivan wrote:

The Kindle Fire originally disappointed me. While it had the form factor I wanted, it was heavier than I wanted to hold. I’d also grown to love the e-paper format of the regular Kindles. But for the past two weeks, the Kindle Fire has grown to push aside my use of the other Kindles.

Why? For one, the screen is nice and being backlit, I don’t have to purchase a light to read at night. Consider that for the cheapest basic Kindle for $80, you’re going to spend another $60 for a case that integrates a light, if you want to read it at night. That’s $140 right there — getting pretty close to the Kindle Fire’s $200 price and gaining so much more.

…

The Kindle Fire doesn’t replace my iPad, but it sure has replaced my Kindle Keyboard. That’s the killer factor here. I think the Kindle Fire will pull more and more Kindle users into the tablet world, where for just a little more money, they get books and more — and for a lot less than buying an iPad.

At TechCrunch, John Biggs wrote:

The Kindle Fire is Amazon’s Trojan Horse. It’s made for the mass of men and women who have been looking into this whole tablet business and like what they see. But it is, first and foremost, a reading device and to fault it for not playing Angry Birds well or offering a sub-par Netflix experience is to ignore its primary goal: to inject the concept of Amazon content downloads into a consumer base that is increasingly inundated with video, audio, and ebook sources.

And Technologizer’s Harry McCracken, writing at Cnet, said:

For now, mentioning the first Kindle Fire in the same breath as the Edsel is even more of an overreaction than assuming that it was going to be an instant blockbuster. With tech products, following through on a product’s promise is at least as important as getting things right in the first place–and Amazon, unlike some of its tablet-making rivals, has a strong record when it comes to doing just that.

I’ve been using a Fire for about a month and I mostly am very happy with it. My biggest complain, shared with most users who have written about the Fire, is the relative insensitivity of the touchscreen. To the extent that is a software problem, I hope it will be addressed in an update Amazon told Streitfield to expect in a couple of weeks. Another prime candidate for an update is the rather fidgety nature of the home page that can make it hard to select one item from the ever-growing panel of favorites at the top.

Another urgent item for correction is a point made by many writers and commenters on the Amazon site. As currently configured, the fire has * no parental controls. The built-in one-click ordering lets anyone who picks it up, say your children or a total stranger, order books, videos, or music without any authentication.

The hardware is what it is and there won’t be any change until a second-generation Fire comes along, most likely in the first half of next year. But even then, don’t expect miracles. Amazon’s top priority is keeping the price low, not producing iPad-like near perfection. That means there will continue to be hardware compromises. But it also means that Amazon can continue to address a price-sensitive market  interested primarily in a media consumption tablet.

The Fire will never make folks who know and love the iPad happy. The good news is that it doesn’t have to.

*–The original version said the Fire does not offer a password lock. This was incorrect and I thank Michael Gartenberg for pointing out the error.

 

 

Let’s Stop Classifying the iPad as a PC

Last month, Canalys reported that “Apple is on track to become leading global PC vendor”. That would be a tremendous accomplishment, given that no reports had Apple in the top 5 at the end of 2010. How will Apple accomplish this? Well, according to Canalys, they will do it with iPads. You know, a “PC” without physical keyboards, trackpads, or mice. This re-classification got me thinking, what is a PC and how wide does this definition go?

I must point on very early that I am not debating here if the iPad can duplicate, replace or augment certain usage models a PC can do. I know first-hand this is true because I use my iPad now in circumstances that two years ago I would have only used my PC. A few examples are airplane trips and at Starbucks. I am not alone. Respected journalist Harry McCracken wrote a piece on Technologizer  entitled, “How the iPad 2 Became My Favorite Computer“.  That is NOT what I am asking. I am asking about the industry classification of the device.

I’d like to propose a few tests and run a few products through to see what filters out. A PC today must have or be:

  • Electronic: a PC must run off some kind of electric power, AC or DC.
  • Operating system: a PC must run something above BIOS or machine code
  • Personal: the PC is designed for one or a few people, not many. In other words, it’s not a multi-user server. (Clarification: It could serve many people, but isn’t classified as a server.)
  • Portable: a PC can be moved
  • Apps: a PC must be able to run an application above the operating system level
  • Storage: a PC must be able to store personal data, settings or content
  • Customizable: a user can change the PC’s settings
  • Input: a user can input data so that the PC will react to commands
  • Display Output: the PC will visibly show data based via some visible display technology

So, this seems fair, doesn’t it? Well, what products then are “personal computers” by with this definition?

Echo Photo

           

Is this fair? Some of the items above even have generally accepted industry designations like e-readers, consoles, watches and refrigerators. Well, so does the iPad. IDC, Gartner, and Forrester already designated the iPad a “tablet”, so it seems there’s precedence.

We all know the iPad isn’t a computer; it’s a tablet, so why do we all keep pretending? It is fun, I know, even I’m amused when writing this. So what is a PC?

I believe a PC has all the nine characteristics at the top of the page but with the following conditions:

  • display greater than 5″
  • physical keyboard
  • physical mouse or trackpad
  • light enough to be picked up by an average age adult 
  • open application environment where users can load, side-load without having to jail-break

While there will always be exceptions to the rule and definitions will evolve over time, I suggest this definition could help the industry to simplify and better educate.

Does any of this classification debate anything?  While I agree with Tech.pinions colleague Ben Bajarin when he says, “Consumers don’t care nor think about it.  They just hire products to get jobs done”, I do believe it matters a lot.  Companies, investors, developers and consumers are influenced by classifications.  Classifications get used to describe market share, which then impacts financial analysts, which then could impact the stock price of the company. This is also a factor that comes into play with technology investments. “Should I develop this piece of technology for the PC or tablet market”?

My final thoughts are on the future.  The way technology is headed in the future, calling the iPad a PC will set precedence that will only lead to even more confusion and misinformation.  I believe there’s a scenario where the smartphone has a chance to dethrone the PC.  If people change their usage models and start adopting it widely, should we re-classify the smartphone as a PC in a few years?   If the answer is “yes”, then let’s also be prepared in 2015 to announce, “Timex could become the leading PC maker in 2016″.  Let’s stop classifying the iPad as a PC, it only serves to confuse people.

I’d love hear your thoughts. Do you believe an iPad should be classified as a PC?

Also see: Who Really Needs a PC Anyway?

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Who Really Needs a PC Anyway?

James Kendrick at ZDNet wrote a post asking an interesting question: Who really needs a stinking tablet anyway? His post is well articulated but misses the bigger picture of what tablets are and more importantly what they represent. So rather than look at the world today where tablets are in their early maturity stage, I would rather look to the future, at which point my title, –Who Needs a PC Anyway?– will be a valid question.

In my TIME column today I shared some perspective on what I am calling the Great Tablet Debate. Similarly I wrote a TIME column in June on Why Tablets Represent the Future of Computing. Going back even further when the iPad was first announced and demonstrated I wrote a column (I am quite proud of) for my friends at SlashGear called From Click to Touch – iPad & The Era of Touch Computing. I reference those three articles because they represent a much more holistic view of my thinking than I can get into with one single column – although I will try.

Along those lines I also strongly encourage a read of MG Sieglers post on how Tablets are Computers too.

The key to this whole discussion is to understand the mainstream part of the consumer market and their relationship with technology. If we use the diffusion of innovators theory then we have a start at understanding how technologies move throughout the consumer adoption cycle. What that theory doesn’t deal with, however, is how each group has different demands and expectations with technology.

The innovators and early adopters bring a very different mindset to their tech products than do the early majority, late majority, and laggards to a degree. I think studying the innovators and early adopters (a group I am in) is interesting but the early and late majority are the most important because they represent the largest part of the market.

In Crossing the Chasm, Geoffrey A. Moore dives deeper into this topic by pointing out how most technology products fail to cross the “chasm” – to move from early adopters to mass audience. He also points out, in this classic book, how each market of the diffusion of innovators has very different needs.

So the key is to understand the different needs of each of these markets and especially the early and late majority. We have done research with this category and found that more than 90% of the time consumers primarily use less than 5 applications with the top two use cases being checking email and browsing the web. None of those top 5 applications used 90% of the time are CPU intensive. In fact most PCs today have significantly more processing power than a consumer regularly uses. I’d actually argue that todays PCs are overkill for the majority of tasks consumers do regularly. They simply use them because prior to tablets they had no mobile computing option.

When it comes to my firms consumer research on the topic of using a tablet or using a PC we are finding that more consumers observe they can do everything they regularly do on a PC with an iPad. The reverse is true with the innovators and the early adopters whose technology demands and expectations are very different. Most in that category still want or use a PC due to those demands. James’s observations in his column more closely represent our research with the early adopter category but not that of the mass market.

The trend we are seeing, that is quite frankly fascinating and potentially dangerous, is that we are hearing consumers buying iPad’s instead of upgrading an older desktop or notebook PC. Their logic is that the iPad will give them more portability and ease of use in the majority of tasks they do regularly, leaving their old notebook or desktop to fall back on for the small use cases where they need it.

This is fascinating because it means that for the time being iPad’s are extending the life of desktop and notebook computers. Consumers are realizing their desktop and/or notebook is good enough and are using the iPad for the new experiences in portability and lean back and lean forward modes. It is also dangerous because my intuition is that as consumers realize how the iPad (or tablets) suffice for most of their major use cases they may realize they never need a clamshell PC again. Also, after a case can you guess what the second most purchased accessory with an iPad is? If you guessed a keyboard you are correct.

Our analyst colleagues at Canalys have for the first time lumped tablets into their overall PC industry tracking. A move I applaud, because in my opinion tablets should be counted as PCs because that is what they are and more importantly that is what they represent to consumers. The tablet should simply be viewed as a form factor evolution of the PC. I expect even more form factor evolution of both the tablet and the PC in the years to come. Tim dives deeper into this in his Monday column on Tech Trends and Disruptors for 2012.

Furthermore, I strongly believe that the limitation in productivity observed by some with the iPad, is not a function of the hardware but the software. As more apps get developed to increase productivity on every front and for every vertical, I believe the industry will have its “a ha!” moment. Shockingly–or not–more and more consumers we speak to have already had this moment, I am just waiting for the tech industry to catch up.

Tis’ the Season of the iPad

Nielsen released the findings of a U.S. Survey where they were hoping to discern what electronics products will be hot for the 2011 holidays. Among kids, not terribly surprising, was the iPad atop the list for kids aged 6-12 ranking an all time high with 44% naming the iPad as their most desired product for holiday 2011. To quote the Nielsen study:

Consistent with U.S. kids’ 2010 wish lists, the Apple iPad is the most desired consumer electronic among kids ages 6-12 for holiday 2011. In fact, the iPad increases its stronghold, with nearly half (44%) of kids expressing interest in the product, up from 31 percent in 2010. Two other popular Apple devices – iPod Touch (30%) and iPhone (27%) – round out kids’ top three, with computers and other tablet brands each appealing to a quarter of younger consumers.

I would like to point out how significant the reality is that our kids are growing up using tablets and more importantly touch computing platforms. This fundamentally sets the stage for the massive shift in computing we are anticipating over the next 5+ years.

What is interesting as well in this category is that Apple owns the top three categories in this age group, a significant change over the same survey last year. Again young US consumers, and I would argue in other parts of the world as well, Apple is gaining as a desired brand. I’ve stated how important brand is to the long term life of a customer more then a few times and the significance of this for Apple can not be overlooked by competitors.

Also and perhaps the most significant statistic in this age group is how the desire for a computer has moved down. More on that shortly.

Looking at the 13 years and older demographic Nielsen found:

Among consumers ages 13 and older, appeal for the iPad (24%) has also broadened relative to last year (18%), and exceeds that of computers (18%), 2010’s top item. Further, it appears the iPad has successfully paved the way for other tablet offerings, as a notable 17 percent of adults/teens also express interest in non-Apple tablets.

What is surprising is that for the first time in this US demographic the iPad has overtaken the computer as the most desired holiday item. I know there is a hot debate about whether the iPad, or tablets in general, are the computers of the future. I tend to believe they are but regardless of who is right, for the time being, the iPad is a more desired product than PCs. Again that may not always be the case but the reality is that it is right now.

This is significant because I believe that tablets will extend the life of notebooks in consumers lives giving them less of a reason to urgently upgrade older notebook technology. This is significant because if I am right it will throw off the anticipated refresh rate of notebooks and desktops in consumer markets.

From an industry standpoint the tough reality many have to start thinking about is the very real possibility that tablets may very well be replacing notebooks.

Of Course Amazon Kindle Fire Cannibalizes the Apple iPad

One way I test and gauge insights is to engage in and monitor social media.  It’s certainly not the only way, but it is one of many ways.  One very interesting discussion I am monitoring is the Amazon Kindle Fire versus Apple iPad.  There are definitely two camps that exist and not a lot in-between.  So what will really happen between these two tablets?

Different Target Markets, BUTimage

One thing everyone needs to realize is that there are many different kinds of consumers with very different needs, wants, drivers, and checkbooks.  Sure, our friends and family kind of seem like us, but that’s because its human nature to surround ourselves with people similar to ourselves.  We may think that we are a lot different from our friends, but statistically, we are very similar.  Let me give you just one example….. According to the U.S. Census bureau, the median household income in 2010 was pegged at $49,445.  Do you make a lot more… a lot less?  You get the idea.

As it relates to the iPad, there are consumers who would have stretched up to buy a $499 iPad 2 who will, instead, buy the $199 Fire.

Different Needs, BUT

The Fire and the iPad are also architected to address different needs, but that doesn’t necessarily dictate exactly what a consumer will do with it.  Tech.pinions colleague Tim Bajarin nailed it when imagehe talked about the differences in content creation and consumption on the iPad versus Kindle.  One thing to be careful with however, is what we mean exactly by content creation.  Is creating an email content creation?  Is cropping a photo content creation?  I happen to think it is and I believe that those who buy a Kindle will, in fact, be creating emails and cropping photos.  Why, because it’s the best available device they have to do that with at that moment.

Here’s the analogy, and it’s a personal one.  My teenagers don’t own a tablet, and therefore they watch videos and read books on their iPhones.  It’s the best device they have at the moment, even though it would be a much more enjoyable experience on the iPad.  Problem is, Dad (me) is too cheap to buy another one.   Those who have a Kindle will be creating light content because it’s the best device they have at that moment.

It Won’t Matter This Holiday Season

In the end, none of this discussion is relevant this holiday selling season.  Based on information from my contacts, both Apple and Amazon have been conservative in their production forecasts.  Apple doesn’t want to get stuck with potential inventory before their next iPad and Amazon took a cautious tone given it’s a new product and they barely break even on the gross margin side with an untested video and music upside content model.

Net-net, for the holidays, both will sell out and we won’t be able to see who will be the finest cannibal.  BUT after the holidays, when inventories are adjusted and there isn’t a line for either, if Apple either doesn’t adjust their pricing, introduce a lite-iPad, a 7″ iPad, or a new kind of subsidized business model, they will lose out in volume to the new class of 7” tablets, not only from Amazon, but also from Barnes and Noble.

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The Kindle Fire and Nook Tablet Will Not Slow the iPad

Philip Elmer-DeWitt reported on the Fortune blog about data released suggesting the potential impact of the Kindle Fire on iPad sales. The data originated from ChangeWave and points out several key findings from their survey of “early adopter types.”

  • 5% of those surveyed said they had pre-ordered or were very likely to buy Amazon’s new Kindle Fire, exceeding the 4% who said they were very likely to buy the original iPad in 2010.
  • 26% of those 5% said they would delay or put on hold the purchase of a new iPad.

    •  
    I have to question the FUD this data is causing for a number of reasons. First of all the survey was conducted with early adopters (early adopter types actually whatever that is). Early adopters are not the mass market and nor do they represent the mass market. Early adopters shop for technology with a very different mindset than mass market consumers. Because of that it is hard to use data only taken by early adopters.

    Taking the data one step further only 5% surveyed said they pre-ordered or were likely to buy the Kindle Fire. If we do the math, 5% of the 2,600 early adopters types they surveyed means 130 people out of 2,600 said they pre-ordered or were very likely to buy the Kindle Fire. Keep in mind these are early adopters and I’m guessing most if not all of those 2,600 surveyed owned iPads.

    Now 26% of the 130 (5%) said they would delay or put on hold the purchase of a NEW iPad. That means 33.8 people of the 2,600 early adopters surveyed said they would delay or put on hold the purchase of a NEW iPad. When we look at the data under that lens the headlines becomes less ominous for the iPad.

    Now I do expect both the Kindle Fire and the Nook Tablet to do well. However, the fundamental difference is that those two products are competing with each other rather than with the iPad.

    Brooke Crothers at CNET provided research from eDataSource that stated preorders of the Kindle Fire were tracking to exceed one million. I have seen a number of credible reports forecasting Amazon to sell 4 million Fire tablets during the quarter. Most recently the DigiTimes today reported that Amazon has upped their orders to 5 Million due to demand.

    Both those numbers are plausible but the point needs to be made that those customers are either early adopters or customers who were in the market for a Kindle in the first place. I have a hard time believing that mainstream consumers (not early adopters) who were strongly considering an iPad have changed their mind and now going with the Kindle Fire or Nook Tablet.

    IDC’s forecasts for readers in 2011 are 16.2 million, I actually believe that is low, this category is still hot with a lot of consumers. My point, however, is that those consumers in the market for ereaders like the Kindle and the Nook are not in the market for iPad’s, yet at least.
    I’ll end my take on this data with this. Brooke also quoted a separate report today from Rodman & Renshaw’s Ashok Kumar claiming that iPad momentum is slowing. Asok stated:

    “Our checks indicate that production volumes have been scaled back due to moderating sell-through. We estimate that iPad volumes in the current quarter will be 12-13 million units, down from previous estimates of 14-15 million.”

    I think he is wrong but even if he isn’t that would still be more iPads in a quarter than Apple has sold before still putting them over 30 million iPad’s sold in calendar, not fiscal, 2011. That’s still a lot of iPads.

    [VIA Fortune, CNET]

    How My iPad is Taking Over My TV

    I have been enjoying the new AirPlay iPad and iPhone mirroring a little too much. Every since updating to iOS 5 on Apple TV, iPad, and iPhone, I have been using the AirPlay mirroring function every chance I get. In case you are unfamiliar with this new feature, AirPlay now lets you mirror any iOS 5 device through Apple TV to your big screen. This brings not just streaming video, photos, music from certain apps but from every app.

    I have been using this new feature to browse the web, play games, check twitter, watch Hulu and YouTube, make music with Garageband, Face Time and more all on my 55″ TV. I am not sure how terribly practical all of this is in the long run but I am exploring the possibilities.

    One use case that has been interesting in particular, is using the iPad and mirroring it to my Apple TV, then using my Bluetooth connected keyboard to use my big screen as an external large display for my iPad. In this use case I have responded to e-mail, wrote a column, and done general text entry using the iPad now on a large screen.

    Again, this I’m sure is not something many are doing, or will want to do, I am simply exploring the possibilities.

    In this experiment, I again have been debating in my head whether or not Apple needs to or should build an actual TV set. It seems to me that Apple TV as a set-top-box along with operating system mirroring could go along way in satisfying the needs of a TV solution.

    This has also made for a great technical demo. Countless times now, when people were over, I have shown this demo and quickly brought up photos or video I just took on iPhone or iPad and brought them to the TV. Even just for fun I have showed off new apps using the TV rather than just showing people on my phone. Again, not terribly practical but fun.

    As much as I have been having fun with this experiment it needs to improve in several ways.

    First of all, I’d like to see my iPad or iPhone mirroring go full screen on the TV. There are obvious technical challenges involved with this but they are ones which can be solved. As you can see from this image I have my Hulu+ app on my TV using AirPlay mirroring but there are black bars on the side.

    When using the iPad this was less of a big deal as the screen is larger but with the iPhone using mirroring is almost pointless because it is so small.

    Another change that needs to be made is when the iPad goes to sleep, Apple TV mirroring goes off. In many cases where I was typing with an external keyboard for example, I was not actively using the iPad screen. I’d like to still use iOS mirroring in many cases even if the iPad or iPhone goes to sleep.

    I’d really like to see perhaps a split screen, with iOS and my live or broadcast TV done better. It would be interesting to be able to watch TV, whether recorded or live, and have something like the Twitter app or Facebook app up on the screen simultaneously. I know certain TV’s from Samsung and a few others can run apps but doing this without the need for a new TV using what I have (Apple TV and an iPad) is a better value proposition.

    Lastly, I would like the same iOS mirroring on Apple TV with OSX. I’d like to be able to do something similar to what Intel offers with Wi-Di, where you can mirror your notebook to the TV.

    Key Takeaways

    After seeing iOS on my TV, I am absolutely convinced it belongs on my TV. Using apps on the big screen has been a fascinating experience. I literally can not wait for the day when iOS developers can write apps specifically for the TV.

    Another interesting take-away has been notifications. As I have been doing app mirroring and using the Hulu app for example, I have found it valuable to see a quick alert from either a news source, email, twitter etc. My wife finds it annoying but just the experience of seeing notifications of things I care to be notified of, on my TV while being entertained, was interesting.

    This experience has shown me a vision of what I believe a more encompassing Apple TV experience could provide. Apple is clearly only scratching the surface with iOS mirroring on Apple TV and I am excited about the possibilities.

    Just to show it, here is Face Time and the Writer App on my TV.

    A $299 Amazon Kindle Fire- What It Could Be

    Last week the industry was engrossed in the Amazon Kindle Fire launch. There was lots of excitement, speculation and 299kindle2many questions on it. The $199 price point was one of the biggest points of excitement, particularly in that it was less than half the price of the Apple iPad 2. What could a $299 Fire look like? What features and use cases could it support over the $199 version?

     

    Design Strategy

    Every company needs a focused strategy, particularly in the risky tablet market,  and Amazon surely has one.  Amazon must balance inexpensive tablet “must haves” with ways to monetize their store.  That’s why consumers can buy an inexpensive tablet and Amazon doesn’t need to make 40% gross margins.  Their bet is that Fire consumers will buy their books, movies, TV shows, music, magazines, and maybe even durables.  So everything needs to lead to an Amazon purchase or be a required element.

    Operating System

    Amazon will stick with Android 2.X as their base as it’s the only OS that Google has opened up.  Google has yet to open up Honeycomb, even as Ice Cream Sandwich (ICS) is around the corner.  If Google opens up ICS, they would want to move there for many reasons.  First, they get access to larger screens, 10″ all the way to the TV.  Secondly, they would need to ask less of the developers to modify their apps to work decent on a 10″ display.

    Display

    The display would most likely be a 10.1″, 1,280×800, IPS display.  This is where the current cost break-point is right now.  The other possibility is 1,024×600 display, given these are shipped en-masse on netbooks and mini-notebooks.  Amazon could claim “HD” with both, but with x800 it would be “more HD accurate” given it could support real 1,280×720 (720P) movies.  Also at x800 they can claim that the resolution is better than the iPad 2 at 1,024×768.  That is, until the rumored iPad 3 comes out with Retina Display.

    Web Sites versus Apps

    One challenge Amazon will have with a 10.1” display and Android 2.X is the app’s appearance. It’s a stretch for Android 2.X apps to even look good on a 7” display. Many of them are blocky, because they were designed for a maximum of 5” displays. At a minimum, Amazon would need to write custom apps for mail, calendar, and address books. I can see Amazon encouraging users to use web sites via Silk versus apps as well and they would need to beef up Silk’s browser to do this. Today’s tablet browsers have limitations, limitations Amazon’s Silk could remove. One simple issue is tablet browser’s ability to access the file system. The iPad’s browser, for example, is unable to upload photos to Picasa. This is why you need an app for that. Silk could conceivably remove the barrier.

    Processor, Storage and RAM

    While it doesn’t necessarily need more of this for a better experience, the competitive optics demand a bump, particularly on storage. There’s no reason to move beyond the OMAP 4, particularly if the $199 Fire has the TI 4430, which can easily do 1080P HD video.  RAM could very well stay at 512MB, but for the optics, would most likely move to 1GB.  Storage would definitely bump beyond 8GB to at least 16GB.  Apple has made storage the break point for iPad, and Amazon knows they cannot be at a disadvantage, even with Amazon Cloud Storage as the backup.

    Living Room Entertainment with Remote Control

    Here’s where it gets interesting.  The $199 Fire is designed for individual video content.  The step-up $299 could be positioned as the living room alternative to the “over the top” set top box.  By providing a simple HDMI 1.4 port out and a remote control, consumers could watch all the 1080P TV and movies from Amazon Prime and Amazon VOD.  Consumers are always looking for a way to justify that extra $100 and this alone could be the reason.  To accomplish the same this on the iPad, the consumer needs to buy the expensive HDMI connector and have an iPhone, load the “Remote App”, and setup AirPlay.   The other Apple alternative is to buy an Apple TV, and extra $99.  Amazon could have a cost and simplicity message over Apple in the living room.

    Optional Living Room Dock

    Taking the living room video usage to the next level, Amazon could offer an optional $29.99 dock which makes living room video even easier.  Place the $299 Fire into the dock and it gets power, HDMI out to the HDTV, speaker out, and Ethernet.  This would be an easy way to connect the Fire to the TV.  It also provides another justification to buy this over an “expensive” $499 tablet that doesn’t provide this option.

    Camera and Mic Enable “Entertainment Assistant” App

    If the $299 Fire has a front facing camera and microphone, Amazon could “listen” or “watch” the content you are consuming in your living room. This would be user-driven as not to be “creepy”. Think of it as Pandora for all types of content, including TV shows and movies. The user could point the Fire to the TV, press a button and a few seconds, an in-context search result would result. In addition to the news and social media results, it would also show relevant results from the Amazon store.

    All it would take is for Amazon to index what they already have. They have access to 18M pieces of content; TV shows, movies, songs, books, and magazines. With Silk, they will also know every web site you access, where you shop, what you buy and how long you stay there.

    clip_image004

    Even without any access to the rich Amazon data, simple Evernote was able to extract “Dallas” from this photo. Google Goggles is able to extract “Fox Sports” too. Now imagine this capability with Amazon’s access to basically all content and wherever you have ever browsed.

    Camera to Improve Shopping

    At $299, consumers will expect a camera, maybe even two.  What’s its primary role?  Shopping, of course.  What?  Yes.  Like I said before, everything needs to lead to the Amazon store.  The camera could serve as an augmented reality try-before-you-buy feature.  Amazon is great at selling physical books, DVDs, electronics, and toys, but what about items that are better sold in a retail store?

    • Clothing: In conjunction with the TV and remote, see what different clothes look like on you and get the perfect fit, too.  The camera is taking videos of you and overlays the clothes on you.  What to change the color or size?  Just use the remote.
    • Jewelry: Watches are interesting.  Will the face be too big on the wrist?  Is it too masculine or feminine?  Use the Fire to see what it looks on you before you buy it.
    • Shoes: Afraid of getting the wrong size or that on you it looks ugly? Print the Amazon Sizing Grid.  Take the picture with the Fire of your feet on the grid.  See how it looks on you; get the right size shoe, including the correct width.  Now that it has this much info, why not now introduce custom show sizes?
    • Home: How will those towels look in your bathroom?  That patio furniture on your patio? That lamp on your end table?
    • You get the idea; use the camera with augmented reality to make the shopping experience more fun and with less risk.

    Camera for Universal Videoconferencing
    What if your parents use Skype and you use Apple Facetime? One of you needs to change programs or you don’t get to communicate with each other. Amazon, with its data center prowess, could become the “universal adapter” for video services, and make money doing it. Skype, FaceTime, Google Video, Yahoo Messenger, it doesn’t matter. If you use Amazon’s service, you can connect to all of them. A stretch? Maybe, but remember, via Silk they know every site you go to and have a login as well. What’s to stop from the “embracing and extending” if they can further lock in customers?

    A Note on Living Room Gaming

    Amazon could relatively easily use the dock above, the included remote to enter living room gaming.  But they have a big issue.  Android 2.X looks horrible on the big screen.  Even Angry Birds.  I have tried racing games, too.  So Amazon would need to further break, or fork, from stock Android to make this happen.  Developers would need to do this, too.  When or if Google opens up Ice Cream Sandwich could be the time this happens.  I cannot imagine Amazon going after living room gaming without ICS, although tempting.

    Conclusion

    I have no inside information whatsoever on any future Amazon Kindle Fire.  BUT, it only makes sense for Amazon to introduce a higher-priced, higher-feature tablet to intercept the 10″ competitors.  Also, given Amazon’s business model, these features must drive Amazon.com store revenue, too.  This $299 Fire as I have laid out does all of these things.

    Is There a Technology Race to the Bottom With Price?

    I have been surveying the collective schools of thought related to the Amazon Kindle Fire launch. One thing that many writing publicly on the matter emphasize is the price of the Fire and rightly so. $199 is an aggressive price but I would argue that price is not everything when it comes to personal technology.

    Those that incorrectly believe the Kindle Fire is a threat to the iPad use words like commoditization of hardware. Again the common logic is that because one competitor comes in at a lower price it will force the market down. This however is entirely incorrect.

    There will be some who try to compete on price with Amazon however they will likely fail and either lose a ton of cash attempting to compete or exit the tablet market entirely.

    Apple however has no need to get more aggressive on price with any of their products.

    Related Articles:
    Apple Doesn’t Want to Sell Corollas
    Why Apple Can’t Chase the Low End

    What is key to understand is that if Amazon did not have a robust services business as a retailer and distributor of digital media the Kindle Fire would not be successful even at $199.

    This statement is made clear in Jeff Bezos quote to Brad Stone in his Business Week Article.

    “What we are doing is offering premium products at non-premium prices,” Bezos says. Other tablet contenders “have not been competitive on price” and “have just sold a piece of hardware. We don’t think of the Kindle Fire as a tablet. We think of it as a service.”

    I have said before that the Kindle is to Amazon what a retail store is to Wal-Mart. The Kindle represents access to Amazon’s services.

    That philosophy is made clear when Bezos states that they don’t view the Kindle as a tablet but instead as a service.

    This backs up my point that without the backing of the Amazon services the tablet would fail even at $199. Subsidizing hardware in order to make up revenue on the services is a strategy employed by many. However it only works when a service powers the hardware.

    What Could Really Change the Game
    I’ve had this discussion lately with a few other analysts around whether or not Amazon ultimately wants to be in the hardware business. Right now they have to in order to gain market momentum and validate their service with hardware.

    What could be very interesting is if Amazon gave away or licensed their software for other tablet vendors. This would allow for hardware innovation in and around Amazon’s ecosystem. If the business model panned out Amazon could even include hardware partners in the services revenue over time. Amazon already has revenue sharing business models in place so this is not a stretch to imagine.

    Amazon does not have the desire or expertise to make extremely elegant hardware. Which is why it is interesting to think about the possibility of letting those who have hardware expertise design some innovative hardware around the Amazon software and services platform.

    Like Google, Amazon is a services company who thinks about hardware and software as a way to access their services.

    The other thing this strategy would do is put pressure on Google with Android. If Amazon’s Android fork can provide a better experience and economics for hardware partners and developers Android could be in trouble.

    Price is important but I contend it isn’t everything. Just because products are cheap it doesn’t mean they are quality in all aspects of experience.

    We will see what the reviews have to say once they actually get to review the Fire. My sense though is that everyone will make a bigger deal of the experience with the Amazon services over the hardware.

    10-4, Good Buddies

    It’s official: Apple will unveil the iPhone 5 on Oct. 4.

    But it is widely expected that they’ll make an announcement for the iPad, too:

    Last week, Facebook CEO Mark Zuckerberg said Facebook would probably introduce an iPad app at some point. I suspect “at some point” means Oct. 4. And the Facebook iPhone app, which kinda sucks, deserves a refresh at the same time.

    But wait: Aren’t Apple and Facebook wary of each other? Apple tried to launch its own social networking system last year. Remember Ping? And Apple is well aware that Facebook will soon have ONE BILLION USERS who don’t really care if they access Facebook on an iPhone, an iPad … or an Android phone, an Amazon tablet, an HP TouchPad (er, nevermind), a toaster, an Xbox, or an Etch-a-Sketch.

    Facebook currently has 800 million regular users, and 350 million of them tap into Facebook on a mobile device, even though the mobile Facebook apps kinda suck.

    Yes, Apple and Facebook are wary of one another. But they share a common enemy:

    Oh, hi, Larry.

    And, as the ancients so wisely noted, “The enemy of my enemy is my friend.”

    Mobile is the future; Facebook lacks a strong mobile platform, which Apple can provide.

    Social is the future; Apple lacks a strong social platform, which Facebook can provide.

    Google is the enemy; Android competes against Apple’s iOS and Google just bought a mobile phone maker (Motorola Mobility for $12.5 billion), and Google+ (the fastest-growing social network in history) competes against Facebook, and everywhere Apple and Facebook want to go, Google is there waiting for them, licking its chops.

    So, I expect Facebook to “friend” Apple, and vice versa, at next Tuesday’s events. And that, to me, is far more interesting than the incremental improvements we expect to see in the iPhone 5.

    Why The iPad Could Be Huge in China

    I’ve stumbled across some interesting research from Citi Group Financial’s internal research group. The research report was specifically about tablets but the part I found interesting was their research related to tablets and China.

    Citi surveyed almost 2000 people and found some interesting results globally for tablets. With the US they found that tablets and specifically the iPad were not an immediate threat to replace PCs. Their research pointed out that in the US only 8% had purchased a tablet with the intent of replacing a laptop. The bulk of the usage of tablets the research turned up was for more lightweight consumption. Things like web browsing, email, social networking and multimedia were the top usage models. Their China research however turned up very different results.

    It appears that in China there are significantly more people looking at buying tablets and using them as a laptop replacement. 21% of the people in their China survey said they currently own a tablet compared with 17% in the US/UK. 26% of China respondents said they intend to purchase a tablet over the next 12 months compared to 12% in the US/UK.

    More interestingly with this data was that 31% of Chinese respondents said that their interest in purchasing a tablet was to replace their notebook. Another 26% expressed interest in a tablet to replace their desktop and another 30% interested in replacing their Netbook with a tablet.

    The reason the iPad could be huge in China is firstly because China is a huge market and second because they appear to be interested in a tablet as a PC replacement. Which is a fundamental difference than why US and UK consumers are buying tablets.

    If it was clear before it should be crystal clear now why Apple is so laser focused on China. In fact all the trends in China are playing to Apple’s favor. The iPad for example has 73% of the tablet market share in China and we can expect that to grow over the next few months and even more with version 3.

    The other interesting thing about China is that it is one of the fastest growing regions for PC sales. This data seems to suggest that China could also become one of the fastest growing regions for tablets as well.

    When I first read this data, I thought it seemed a bit too optimistic about China and tablets. Mostly because we are constantly reminded by all the large PC vendors how fast China is growing as a market for PCs. So this data seemed at odds with the reality that PC sales are accelerating in China.

    PCs are still maturing in China so why would there already be significant interest in tablets over PCs? The answer I feel lies with China’s need and desire as a market for small and mobile technologies.

    Netbooks had quite a run in China and for many Chinese consumers Netbooks were the best priced and sized computers for their first PC purchase. The iPad in terms of size and mobility are highly desirable among the Chinese consumers and may be some of the central reasons they are attracted to tablets so heavily.

    Because China is so large and because PCs are selling like hotcakes over there I don’t suspect that tablets will eat into PC sales in any way that should alarm manufactures. Both will continue to grow and accelerate extremely quickly.

    It is important to note that the China based research was done with those who are in the upper and rising middle class, which is a large and quickly growing segment of China consumers.

    Whether it is with iPads or Macs Apple has a huge opportunity in China.

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