Re: [FRIAM] O'Reilly Radar

[Bill Eldridge]

I've been waiting for this event, as it fits in with some uncomfortable truths people forget - Steve Jobs & Apple do know how to fail in a big way, even though they've also had some spectacular successes. I'm reluctant to say Apple's "jumped the shark", but I think they really needed a successful game changer, and I think the PR from this announcement has damaged them - more below. At the moment, Apple is under pressure from 4 sides - Nokia/Maemo, Android, Kindle/eReaders & Tablets. Let's start with Nokia - yesterday it was announced Nokia had regained it's 40% share of the market, having dropped down to 35% - that's a helluva bounce: http://www.trustedreviews.com/mobile-phones/news/2010/01/29/Nokia-Regains-40--Mobile-Phone-Market-Share/p1 People have been writing off Nokia, even though one of the reasons they don't abandon Symbian so quickly is that its performance is rock solid, fits the corporate markets, and well, 35% is still quite good market share by itself. But while Apple is crowing about 8.7 million handsets, Nokia did 126.9 million. Not only is Nokia giving away OviMaps to drive up sales, the introduction of the Maemo-based N900 gives them an alternate platform for smartphone development - one that's arguably a lot better than Android, and forget iPhone. So for those who counted Nokia out, think again. If they get that Ovi store right.... While Android sales haven't been as good as hyped, Motorola still sold 12 million handsets - wanna guess what percentage was the well received Droid? Android apps are estimated at 25,000 now, and even O'Reilly Radar last month was hugely surprised by how quick their Android sales were growing vs. iPhone sales. There's some serious momentum there, especially with Google's new phone showing they're serious about this platform. Kindle/eReaders (Barnes & Noble's seems to be pretty good, but they tipped their hand a bit early to Amazon, giving away some advantage). The iPad announcement basically got everyone looking at tech and user details, to compare the Kindle & iPad - surprise, surprise - people now understand that ePaper/eInk is much much nicer for reading, and that the Kindle can go a week without charging. Apple can talk about other uses, but it's hard to counter that message - either you need color and you stick with a laptop/netbook or you're happy with the Kindle, and besides, that color's coming out on eReaders anyway. A small side-comment is that iPod/iPhone/iPad inability to multitask just gets harder and harder to take, and it runs counter to one of the iPad's professed advantages over Kindle, that it's for more than just reading books (just not at the same time...). Tablets - CES was full of them, perhaps 20 new ones. How many are Android based so can use Android apps, how many are Windows based so can use Windows apps, don't know specifically. Some NVidia Tegra 2-based models. In any event, we're back in commodity computing territory again - while Apple is happy selling 3.36 million Macs globally in a quarter: 2.1 million laptops, 1.2 million desktops. Apple is just tracking the percentage growth in the PC market, with HP now selling 18 million a quarter (including their very popular touchscreen Windows 7 laptops) and Acer 12 million. Where Apple has an advantage is in their margins - they're seen as an elite brand garnering above-industry pricing for similar specs. And this is where I think Apple just shot itself in the foot. Kindle users and Mac users are likely similar market niches in terms of users & demographics - trendy coffee house types, artists, media execs, fill in blank. It's one thing to have Apple compete against the dull corporate Microsoft, or the dull uninspired handsets of Nokia. It's another to come out directly against a popular, alternative device like the Kindle - and lose. When you compare a Mac with a PC, you can always dismiss the cost premium on specs with, "Macs have better quality, they're easier to use, yadda, yadda" - whether it's true or not, an elitist doesn't have to come down from his/her perch to find out - personal preference and aesthetics. But now we're comparing a device with a week's worth of charge and one with <10 hours, a device with cool ePaper for easy reading vs. a backlit LCD, and even the supposed new iPad CPU is turning out to be just another ARM-based System-On-Chip (Cortex-A9 with Mali 50, something similar to Tegra 2 and others.). From the cool user POV, the device seems a "huh?", not terribly compelling even for iPhone owners. For the Apple geek fans who follow the specs, it's light in a number of areas. And the whole presentation unveiling invited people to look close at the details - not good when you're not competing. "Apple doesn't understand what we want in our device" seems the best way to sum it up, and again, that's from many who would be sympathetic towards the "Mac Tax" for perceived extra quality and ease of use. And how quickly can an Android Tegra 2-based competitor release a 2nd version providing anything compelling on an iPad and more? Apple doesn't know how to do fast upgrades. We'll see what happens with the content licensing, an area Apple did very well with for iTunes/music sales. My guess is with Amazon already working this side of the street successfully, Barnes & Noble launching their own version, and others piling in, it will be much harder for Apple to consolidate like it did music. And it's not like people haven't figured out that Apple isn't the most generous to its partners - their only big advantage is the industry worries about Amazon's fee structure. But at this point consumers may start worrying about Apple's fee structure, especially with Apple's 43% margin on the iPad: http://www.computerworld.com/s/article/9150045/Apple_makes_208_on_each_499_iPad?source=toc I guess I also neglected the side threat from Windows 7 as well - Apple has made good on years of bashing Vista, for good reason - but that built in marketing bonanza has just drifted away.Windows 7 was about 5.7% of OS market share by end of December (over MacOS's 4.9%), probably 7% now, but the most important issue is that Windows 7 isn't perceived as the dog that Vista was (even though it's basically a Vista upgrade), so another threat to the perceived superiority of MacOS X. (And in the hot gaming world, Windows 7 will be everything, but that's another story) Owen Densmore wrote: Tom, thanks.  Steve and I (and a few others of us) got pinged a while back for stressing the Ecology of all our digital devices and their data .. not just "web" but TV and phones and the whole shebang.  Even including books (we really like the kindle). This guy, not only writes well, but understands this ecology.     -- Owen On Jan 29, 2010, at 5:01 PM, Tom Johnson wrote: this is for you, pal. ---------- Forwarded message ---------- From: O'Reilly Radar - Insight, analysis, and research about emerging technologies. <radar+feedbur...@oreilly.com> Date: Fri, Jan 29, 2010 at 6:37 AM Subject: O'Reilly Radar To: jtjohnson...@gmail.com O'Reilly Radar Check Mate: Apple's iPad and Google's Next Move Posted: 28 Jan 2010 07:29 AM PST "I think this will appeal to the Apple acolytes, but this is essentially just a really big iPod Touch," said Charles Golvin, an analyst at Forrester Research, adding that he expected the iPad to mostly cannibalize the sales of other Apple products. - The New York Times There is an axiom that the biggest game-changers often result from ideas that, at first blush, seem easy to dismiss. So it goes with yesterday's launch of the iPad, Apple's entry into what they call the 'third category' of device -- the middle ground that exists between smartphone and laptop. Why is the iPad (seemingly) so easy to dismiss? Well, for one, it is an evolutionary device when conventional wisdom suggests that it needs to be a revolutionary device to find a wedge into a new market. After all, the iPod and iPhone that came before it were truly revolutionary devices, offering wholly new functionality, delivering new value chains, and fundamentally changing the relationship that consumers had with, first their media (in the case of iPod) and then their communications (in the case of iPhone). By contrast, the iPad truly does look like a really big iPod Touch, and given its evolutionary nature, it begs the question of who buys this thing and why, especially if you already have a smartphone and a laptop? Confusing the Tail with the Dog Thus, a reasoned analysis is that the iPad is to the iPhone & iPod Touch as the MacBook Air is to the MacBook. In other words, a cool product with a devoted base of happy customers, but in relative terms, a niche product in Apple's arsenal of rainmakers. In fact, the opinion of the above-referred Forrester analyst is hardly unique. Quite the contrary. Check out the discussion boards across Engadget, AppleInsider, and Silicon Alley, to name a few, and do a twitter search on iPad, and the sentiment is 5 to 1 to the negative, with recurring phrases like 'fail,' 'yawn,' 'over-hyped' and 'apple blew it.' Heck, even two-thirds of the audience invited to Apple's own event look bored, offering only feint applause when prompted by Apple CEO, Steve Jobs. So is Apple hosed? Did they blow it? Not even close. But before I get into the 'Why,' let me present, to set some contrast, a favorite saying within Google. Google, after all, is Apple's open 'ish' frienemy, and the company who so many cite as being 'destined' to beat Apple in the mobile wars (if interested in that fork, check out 'Android's Inevitability and the Missing Leg'). If what's good for Google is not so good for Apple, then perhaps the opposite might be true, right? In any event, within Google they like to say that what is good for the Web is good for Google, the premise being that the more the Web evolves as the core fabric from which applications, communications, entertainment, social engagement and information exchange proliferate around, the better it is for Google as the company that organizes it, makes it searchable, and then monetizes it via advertising. So if what is good for the Web is what is good for Google, then what is good for Apple? It's the Platform, Stupid! As I am listening to and watching Steve Jobs deliver what very well could be his last launch of an entirely new product for the same company that he birthed (with Steve Wozniak) 34 years ago (in 1976), I am struggling with two conflicting sensibilities. One is that some of the heart-stopping, holy-sh-t, gaming-changing aspects of Apple's tablet creation still lie below the surface, like an iceberg that only reveals a fraction of its actual mass above the waterline. (More on that in a bit.) In other words, add me to the list of expectant Kool Aid drinkers struggling (then) with a cupful of 'that's it?' punch. But, far more resonant is a second sense that a rapidly rising tide called iPhone Platform is lifting all boats derived from it; namely iPhone, iPod Touch and now iPad (and I still very much believe that Apple TV is due for a near-term reboot to plug into the same ecosystem). And here's the thing, if this was a presidential debate between Apple and Google for the hearts and minds of consumers, developers, media creators, publishers and businesses of all sizes, then the launch of the iPad is Apple's closing argument for why they should be #1 (watch the full video, and let me know if you agree//disagree). Consider this: A $50 billion company that is so profitable that in the last quarter alone they dropped another $5.8 billion of cash into their coffers (now they have $40 billion in cash). Assertion one: not only do we build great products, but we run our business the right way (read about Apple's Q1, 2010 Earnings Call HERE). No less, this same company has been the game-changing innovator at not only the inception of personal computing and not only in transforming the music business, but also the mobile phone. Assertion two: we are the only game-changing innovator who has both stood the test of time and repeatedly matched past successes with new successes. But, here's the kicker; in iPad, Apple is presenting multiple levels of leverage that virtually assure that they will be successful with this new entrant. Why? Because even if iPad (somewhat) cannibalizes sales of another Apple device, as the afore-mentioned Forrester analyst proffers, it's money going out of one Apple pocket and into another. In fact, far from shying away from this truth, Apple wholeheartedly embraces it, with Steve Jobs specifically noting in yesterday's presentation that "because we've shipped over 75M iPhones and iPod Touches, there are already 75M people who know how to use the iPad." A note aside, this premise that existing iPhone and iPod Touch users simply pick up the iPad and know what to do with it is a concept that not only has been affirmed by virtually everyone I know who has played with the device, but is an idea that should be wholly unsurprising to anyone that currently owns either an iPod Touch or iPhone. Now, perhaps you might argue that that's fool's gold, tapping into a mine that is destined to run dry, but that belies the fact that Apple just recently sold their 250 millionth iPod, so I would argue that 'there's a lot more gold in them thar hills.' And that is the key thing that you should take from the iPad launch event; namely, that being evolutionary and doing the same thing over again - by creating a derivative product from the original mastering effort (just as the iPod and iTunes gave rise to iPhone, iPod Touch and App Store) - is good strategy when the strategy not only is working in the market, but also rewards the investment your customers and partners have already made in your ecosystem. Along those lines, virtually the entire library of 140,000 iPhone Apps will run unmodified in iPad (with pixel for pixel accuracy in a black box, or pixel-double running in full-screen), a decision that takes care of both current iPhone Developers and iPhone/iPod Touch Owners. As you might expect, the same is true with iTunes libraries. I can tell you that when I bought a second iPod Touch for my kids over the holidays, the premise that my entire library of apps and media (not to mention, photos) from my first iPod Touch could seamlessly be re-used in the new device was a bit of an 'AHA' moment. Leverage, after all, is a good thing. Mind you, this is independent of the iPad-specific optimizations that developers can take advantage of within the updated SDK (a note aside, now with two flagship devices that are not phones, calling the platform 'iPhone Platform' seems decidedly out of date, and I noticed that in referring to the updated SDK, Jobs & Company referred to it as the SDK, versus iPhone SDK. Expect a developer event, likely tied to the release of iPhone OS 4.0, that brings some order to the naming confusion, in addition to formally conveying clearer constructs for harmonizing development across the two different form-factors). Okay, one last chess move laid out by Apple yesterday, and seemingly, a more focused shot across the bow of Google, and their loosely-coupled approach, was the assertion that "we're the only company that can deliver this type of solution with this price and performance." This point, which is also amplified on the Apple web site (check out the iPad intro video, which feels in its presentation style akin to getting the co-creators of iPad to sign their name on the product), is bolstered by the fact that the iPad is the first device using Apple's own proprietary silicon - the A4 chip, the first offspring of the P.A. Semi acquisition - yet another piece in Apple's proprietary integration chain, including battery technology (iPad touts ten-hour battery life), hardware design, software, developer tools and online services. Google, your move. The Good, Bad and (not so) Ugly of iPad Let's start with the good. The consistent refrain from users that have actually played with the device is that it is fast, surprisingly fast. As John Gruber of Daring Fireball notes, "everyone I spoke to in the press room was raving first and foremost about the speed. None of us could shut up about it. It feels impossibly fast." In other words, unlike netbooks, there is nothing underpowered about this device. Secondly, is the fact that with over 1,000 sensors in the touch-based user-interface, Apple is effectively doubling down on the core belief that they have found the future of personal computing, and it doesn't involve a mouse and a physical keyboard. In fact, noteworthy is that not only did Apple deign to completely re-design it's iWork productivity suite for the iPad (it looks very functional,), but a number of the demos spotlighted how having a larger touch-based user interface facilitates all sorts of interesting innovation around virtual controller schemas, since you simply have more real estate to play with, and the level of sensor density translates to a high degree of responsiveness. For example, EA's re-work of their 'Need for Speed SHIFT' racing game showcases the ability to quickly toggle between the inside and outside of a race car, and the ability to change gears from the inside of the car, something unimaginable in the much smaller iPhone. Similarly, MLB (Major League Baseball) showcased their MLB app, which overlays graphics, information feeds, video clips and live game programming in a way that is simultaneously immersive, interactive and highly entertaining. It is both suggestive of a media-centric killer app for the IPad and a bellwether for the future of TV Anywhere, yet another reason that I believe Apple's ambitions with respect to Apple TV remain very much alive. Anecdotal, to be sure, but also pointing in the Apple TV direction, is the fact that iPad applications will be able to display content specifically targeted to an external display connected to the iPad (via the Dock connector), a capability that was never allowed with the iPhone SDK. But the final bit of noteworthy, and compelling, good about iPad is that this just feels like the device that real people (read: non-techies) are going to flock to. For one, the intimidation factor of a tiny device, something that held back Baby Boomers, like my parents, suddenly becomes a non-issue, and, of course, there is the matter of the price. At a $499 entry point, mass consumer is an achievable goal in due time (plus, no pricing overhang for competitors to swoop in). So what's not to like? Well, for starters, Apple was slim on the details behind their vision for tablet-optimized applications, although it's worth noting that the iPhone SDK didn't actually launch into beta until a full eight months after the release of the first iPhone. In other words, the developer side of the iPad story has a second act that is forthcoming, no doubt gated by the extreme secrecy leading up to the device's launch. Similarly, while iPad lays clear Apple's ambition to pursue the e-book market aggressively (they demonstrated a nice iBooks player and added an iBook Store to complement the iTunes and App Store marketplaces), they demonstrated virtually nothing that harnesses the touch, tilt, rich media and programmatic elements that they can bring to the re-invention of print media. This could be gated on the aforementioned developer's event or on difficulties with the print media industry, but it's worth level setting that what they launched is, more or less, iterative to the Kindle's value proposition (Jobs even gave props to Amazon in the presentation) than a complete disruptor. Other random quibbles are the lack of a camera in iPad (for video conferencing, augmented reality apps and plain old photo taking); a lackluster carrier value proposition on the 3G version of the iPad; and for some, the continued (and I assume permanent) lack of support for Adobe Flash. But these are quibbles, not what I consider showstoppers that stand in the way of iPad's eventual success. Netting it out: The best way to think about iPad is as the device that inspired Steve Jobs to create the iPhone and the iPod Touch. It's the vaunted 3.0 vision of a 1.0 deliverable that began its public life when the first generation of iPhone launched only two-and-a-half years ago, and as I wrote about previously HERE, it is a product that is deeply personal to Steve Jobs, and I believe the final signature product on an amazing career. I would view yesterday's launch in that light. Related Posts: Rebooting the Book: One iPad at a Time iPad: The 'Boomer' Tablet It's in the Bag! The Apple Tablet Computing Device The Chess Masters: Apple versus Google Holy Sh-t! Apple's Halo Effect You are subscribed to email updates from O'Reilly Radar - Insight, analysis, and research about emerging technologies. To stop receiving these emails, you may unsubscribe now. Email delivery powered by Google Google Inc., 20 West Kinzie, Chicago IL USA 60610 -- ========================================== J. T. Johnson Institute for Analytic Journalism -- Santa Fe, NM USA www.analyticjournalism.com 505.577.6482(c)                                    505.473.9646(h) http://www.jtjohnson.com                 t...@jtjohnson.com "Be Your Own Publisher" http://indiepubwest.com ========================================== ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org

============================================================
FRIAM Applied Complexity Group listserv
Meets Fridays 9a-11:30 at cafe at St. John's College
lectures, archives, unsubscribe, maps at http://www.friam.org