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Archive for the ‘Analysis’ Category

The Tablet Sweet Spot

A look at where the upcoming Apple Tablet could fit within the current device market and how it will continue to shift the focus away from the desktop towards one based on mobile connectivity.

It’s coming down to the wire and final predictions for the Apple Tablet continue to roll in. The anticipation has been building and the Rumor Mill is operating at full tilt. MacRumors sums it up well:

Over the years, there have always been those rumored Apple products and announcements that seem to take on a life of their own. Products that have been rumored for so long that you never actually think they will ever arrive, and when they finally do, it seems surreal. We can remember three other moments like this:
– PowerMac G5 (2003)
– Macintosh Moving to Intel Processors (2005)
– The iPhone (2007)

The Tablet easily falls into that category. Apple fans have been demanding a tablet-sized device from Apple as far back as the Newton days (15 years ago). Later interest in such a device morphed into a Mac version which we were convinced was poised to be released in 2003 but killed at the last minute. But over the past year, the Apple tablet has once again become the focus of the rumor community — and this time it seems certain.

One of the key aspects of the conversation lately has been a simple question. “Why?”
Put simply, “Why would I buy a Tablet when I already have a laptop and smartphone?” (iPhone or otherwise). To address this, it’s worth considering the not too distant past and the evolution from Desktop to ‘Portable’ computing.

Laptops, Desktops, and Redefining the Space In Between

When laptops first entered the scene in the mid-80’s they were the very early stages of a gradual trend toward mobile computing. As with most technologies, on day one they lacked a little something. In this case, that something was performance; or at least performance per unit cost. The machines were cost prohibitive for most, causing them to be considered as,

“A small niche market” thought suitable mostly for “specialized field applications” such as “the military, the Internal Revenue Service, accountants and sales representatives”. – Wikipedia

Even within the last decade you had to make a conscious decision to sacrifice performance for portability when purchasing a laptop, and all for a fairly steep price. Gradually that tradeoff has been mitigated for many as technology advanced. Today more laptops are sold than desktops as users choose the former over the latter for their primary machines.

The ability to surf the Internet wirelessly at public places, the need to be able to take your office out with you when you travel, and an increasing range of notebook computers have all led to lower desktop sales.’
Laptops posted a milestone in the third quarter of 2008, passing desktop PC sales for the first time, according to research group iSuppli. – DailyMail

So what’s the next step? Some would say Tablets of course! Well, not exactly. After all, those have been tried before and still haven’t really gotten off the ground right?

Hewlett-Packard and other computer makers have sold such [Tablets] with Microsoft software since 2002, with little success. Even after years on the market, less than 1 percent of notebook computer sales are tablets. – MercuryNews

Well then, how about we just keep making the laptop smaller and smaller? Netbooks must be the answer! Apple would say No and I have to agree. True, that Netbooks have given growth to the PC industry in recent quarters but about their only redeeming quality is that they’re cheap. The experience sucks, the performance is weak, and the limited real estate cripples them to performing only the most basic of tasks.

Think Different

So what will Apple do differently? Well to put it bluntly… they’re going to have some balls and go about things differently. They won’t simply release the same old notion of a computer in a smaller form factor and with a touch screen. They will have polished the hell out of an OS, specifically built for a medium sized multi-touch device, and one based on the underpinnings of OS X Touch.

I believe the predictions of an “iPhone on steroids” will pan out. Perhaps this will include a new ‘Home’ screen somewhere between the Desktop in OS X or Windows and the iPhone’s basic Springboard implementation. We may find a windowed environment for switching between multiple running apps or widgets side-by-side a la the Dashboard.

Interaction will be through an advanced implementation of multi-touch of course, and most of the world will be shocked if there is a physical keyboard or more than a handful of external buttons. I’d bet on Voice Control making an appearance for navigating the OS and possibly for text entry as well. Handwriting recognition is still a possibility but I can’t see it for the moment. Haptic feedback from the virtual keyboard? That would be slick. Time will tell.

The key point here is that there is plenty of room for breaking the classic human computer interaction paradigm of using a keyboard and mouse, and this is what will make the Tablet a success where other Windows based models or Netbooks have failed. Previous Tablets were limited to using the standard Windows environment with a stylus, and Netbooks didn’t offer anything new save making the computer as small as possible. The problem is that as you change to these form factors, the classic view of the operating system and input device falls apart, and only now with Apple’s success in bringing Multi-touch to market will we begin to see a solution that works well in practice.

Function and Purpose

But what will the Tablet do and why should we care? What has changed since Jobs quip about the purpose of such devices?

The tablets kept getting shelved at Apple because Mr. Jobs, whose incisive critiques are often memorable, asked, in essence, what they were good for besides surfing the Web in the bathroom. – NYTimes

Just as the iPhone was positioned as a 3-in-one device, “Mobile Phone, iPod, and Internet Communicator” so will the Tablet. What will the three key areas be? Here’s my prediction:

  • Apps
  • Internet
  • Digital Print

Apps

Apps will no doubt be a huge part of the Tablet ecosystem. Most expect current Touch OS Apps to run on the Tablet either at their current resolution or with an updated version for the Tablet’s larger display. Just as with the OS, App developers will need to tailor their Apps to the medium, meaning that a user interface which is somewhat constrained on the iPhone will have a bit more freedom to operate on the Tablet. This could reduce the amount of UIViews needed to display the different states of the App, offer more immersive environments for gaming, and give new flexibility for Apps to display more data on screen at any single point in time.

Internet

As with the iPhone, a huge benefit to consumers will be the always on connectivity of the device. Real-time media consumption via blogs and online news, a persistent need to check and update social networks, and the general desire to be connected to content that matters to you will be a key feature of the device. WiFi will certainly be included but most also expect some form of mobile data connectivity. My bet is on a 3G contract being an optional add-on for the Tablet that may also offer a reduced subsidized price, but there are many models it could take on.

Digital Media

Finally, as has been discussed at great length, Apple appears to be attempting to reinvent the publishing industry and none too soon it seems. Think about it. Print newspapers are hemorrhaging subscribers and online subscriptions aren’t keeping pace. While the web should be able to offer a similar layout experience to print, it’s obviously less portable, less accessible in real-time if you’re out and about, and less of an emotional connection than holding a physical paper or magazine.

There’s something inherently less emotional about the web on a PC. You can’t pick it up and hold it. You can’t touch it. And that’s all about to change.

Apple will attempt to do for print what it’s done for music, and while some say this further threatens the industry by turning its business model upside down, there are strong arguments that it’s actually creating a new viable economy that will thrive in the long term. Picture an electronic version of Wired magazine that you can page through, appreciate the design, view interactive content, and dive in deeper to reference past articles, all at your fingertips. This isn’t dramatically different from what web technologies should be able to deliver but again I’d argue there’s a disconnect when sitting at a screen behind your desk compared to holding a device you can take with you. People want to consume this content on the move. I just hope Apple gets it right.

Tying it all together

One of the aspects that continues to fascinate me is the gradual shift from a box on your desk to an integrated all in one portable system. More important than the hardware really is the redefining of the OS and GUI to a system that works more as an appliance than a typical desktop PC. John Siracusa covered it a few weeks ago when discussing his last decade of OS X reviews.

“The desktop is the one “place” on the computer that every user knows how to get to. People don’t even think of it as existing in the file hierarchy (though, of course, it does); to them it’s a location in the physical sense, and items placed within it behave almost as if they were real objects.”

PC’s today are all based on a file system hirearchy that the user needs to understand to some extent. My files go in my ~/Documents on my Mac and the ‘My Documents’ folder in Windows. Programs are installed in ~/Applications or C:WindowsProgram Files. I’ve argued before that one of the big shifts when switching from a PC to a Mac was the need to “Let Go” specifically with iTunes and iPhoto. These applications completely remove the file system from the users view. Data lives in the Application and the App takes care of presenting the content in a way that makes sense; organized by artist and playlist for example in the case of music or by date and album for your photos. This is taken to the extreme in the iPhone where the file-system isn’t exposed to the user at all. Apps live on the phone, appear in the SpringBoard, and take care of storing their data automatically.

I expect the Tablet to fall somewhere in the middle with much of the filesystem abstracted away as part of the OS GUI. There still seems to be room for a filesystem of sorts however. Rather than sandbox content within a given application, could portions be exposed so that files could be shared and interchanged between apps. Already there are some APIs for handling this on the iPhone… music is one example where your library is accessible by games and other applications and can be played in the background. Could this be done for other files as well? Time will tell.

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I drafted the below post over the holiday’s in all the excitement leading up to the launch of Nexus One. All the talk got me thinking about some of the powerful applications Google could contribute to as their mobile platform continues to grow. Turns out, what I’ve described below pretty much already exists! If, like me, you didn’t already know that… the Official Google Blog has more info, not to mention Tom Tom who’s published a white paper about their similar HD Traffic service.

I’ve left the below post in tact below… naive musings and all. The only thing I should add is that as Google gets more confident in their dataset, I hope they’ll do a better job of promoting this. Apparently Google Maps are still truly best. –djd

The imminent release of Google’s Nexus One has been rampant in the news the last few weeks. While others speculate over whether this will finally be a true iPhone killer or how it will strain relations with Google’s existing partners, I’d argue the more interesting potential isn’t in what hardware Google brings to market but in how it leverages the user-base to offer new compelling services in a way only Google can.

Think of it this way… smartphones present the possibility of an always-connected, mobile, distributed computing network, complete with sophisticated on-board sensors. If only someone could harness them to capture relevant real-time data to then provide smarter and better services (while respecting privacy concerns of course)… Enter Google.

One of Google’s biggest strengths has to be their unique ability to go after the big problems. Ones that require intelligently sorting and sifting through massive amounts of data (Web Search), or ones that require you to go out and find ways to digitize the data in the first place (Streetview). Why not then take it a step further and try to organize some of the ‘data’ we’re faced with haphazardly every day. Say traffic for example.

Proposing… Google Maps with Live and Predictive Traffic Forecasting.

Take for a moment the current state of play for GPS devices. Most systems are unidirectional in that they can calculate a position based on the GPS signal they receive over the air, and then relate it against a built in map source that needs to be updated manually to remain current. Now that status quo is changing with Android and the iPhone as maps, points of interest, and even live traffic for major routes can be downloaded directly to the device on demand. This is a great win for consumers because previous bidirectional systems would have required a dedicated service plan for data but this is no longer necessary as it’s bundled with your cell phone plan.

But there’s still significant room for advancement.

While live traffic information can be helpful, its sparse at best, and for good reason. Historically such systems required a vast network of on the ground sensors capable of relaying real time information to a central system that could process it. This is expensive to deploy and limited to major routes. But lo and behold the times are a changin and our army of smartphones already act as a vast distributed network with sufficient sensing and processing power… plus the persistent network connection is icing on the cake!

So how would it work.

PRIVACY AND OPT IN
First and foremost such a system would have to be opt-in with additional safeguards in place to ensure personal information was not captured.

DATA CAPTURE and TRANSMIT
While running the mapping application, data would be captured in real time describing the current time, your precise location, direction of travel, and current speed. To ensure the data was relevant, information would be discarded if it didn’t correspond with a roadway (i.e., sitting in the McDonald’s drive thru wouldn’t count). Additionally on board accelerometers and other sensors could be employed to verify the user was in fact driving and not walking down the sidewalk for example.

Periodically (but within a few minutes if possible) this data would be summarized, compressed and transmitted to the central traffic server in the cloud.

CENTRAL SERVER
The central server’s role would be to receive and aggregate all the incoming data both to generate a historical view of typical road speeds for any given stretch of road at any point in time, as well as to look for anomalies in the real-time data which could signify an incident.

BETTER ROUTING
With this powerful analysis, ideal routing could be provided in realtime as conditions change on this ground.

Besides the obvious benefits of faster trips, and less frustration stuck in traffic, it also means far better utilization of available roadways, plus fewer emissions and fuel consumption.

So will Google do it? Who knows… but I hope so. They’ve already dabbled with the idea of predictive traffic in Google Maps, and Google seems particularly suited to collect, process, and make accessible the vast amount of data. Plus the rise of the smartphone means it’s all possible without requiring a massive investment in infrastructure. If they really wanted to, I don’t see why this couldn’t be made available openly as well for the iPhone, all Android sets, or even the Palm pre. I won’t hold my breath on all that so here’s to hoping that sometime soon it will come to the Nexus One.

Questions? Comments? Thoughts? Do let me know.

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Mandi asks…

Any good tips for a noob to this fancy-schmancy world of phones intersecting with other technologies? Just got an iPhone since ATT only has NICE phones these days! What are the first things I should look into with this contraption? 🙂

Once upon a time, a phone just needed to be able to call people. Attempting to be all fancy making half-witted attempts at other things like being an organizer, accessing the internet, and playing games just wasn’t a good idea. And so went the conventional wisdom that convergence devices were an unwise proposition. That conclusion however, was blown out the window with the iPhone.

The truth though, is that just because your phone CAN do various things, doesn’t mean you should automatically care about it. It’s easy to fall into the Megapixels, Gigahertz, Terrabyte arms race of technology, but these are all means, not ends. The real question to ask is, “What am I trying to accomplish?“.

So to answer Mandi’s questions, there are some pretty amazing things you can do with your iPhone, and for me, they all boil down to simplifying life and breaking boundaries.

Life in Sync

The days of having to keep a rolodex on your desk, a few numbers on your phone, and your appointment book in your bag are over. Now you can keep everything up to date and accessible no matter where you are. That means:

  • No need to manually copy info back and forth between your phone and address book at home.
  • No having to reenter everyone’s number if you lose or upgrade your phone.
  • No out-of-date copies of info and trying to figure out which number is the right one.
  • Your info is always backed up because it exists in multiple places at once.
  • All your contact’s emails, addresses, phone numbers, and even birthdays are at your fingertips whether you’re online, at your desk, or on the go.

How: For your contacts, start by getting everything in one place. You can use AddressBook.app on the Mac, Outlook on the PC, or even your Google contacts. And there’s always MobileMe if you want the simplest out of the box solution. For calendar’s you can use iCal.app and sync easily to the iPhone or get fancier and sync with Google Calendar as well.

Social Contact

Facebook on iPhone

One of the things that’s surprised me about my iPhone is how much time I spend on it keeping in touch with people instead of sitting in front of the computer. The Facebook (iTunes) app is great because it’s a nice easy way to keep in touch with everyone without all the other my-little-princess / mob-wars / pirate-vs-ninja distractions nonsense.

I also find myself emailing people more often from my phone than from my computer desk which is great because I can do it while sipping a coffee, riding the train, or waiting at the airport. And because it’s synced over the air, if you start a message on the go, you can finish it back at your desk or on Gmail later on.

Ohhh… and it is a phone after-all… so that’s nice for keeping in touch too.

Reading

For me, this means short-form current-events by way of RSS feeds and news sources. I use Manifesto (iTunes) to keep up on a few of my favorite blogs and Google News which automatically renders a nice tidy iPhone version. Again, this let’s me do my reading whenever I have a bit of down time and wherever I happen to be.

If you want to take it one step further and read books there’s the excellent app Classics, as well as the Stanza (iTunes) and Kindle (iTunes) eBook stores.

Manifesto on iPhone Google News on iPhone

Games

My iPhone Games

I’ve said it before but gaming on the iPhone is huge. The games are fun, portable, cheap, and imaginative. Plus, features like location awareness, motion sensing, and an ever present network connection allow for endless new creative possibilities.

iPod

Don’t forget, the iPhone makes a great iPod too. Even though you probably can’t fit your entire music library on it, it’s easier than ever to create some iPhone specific playlists. Just use the Genius feature to quickly create some great playlists and sync them to your phone.

Wrap up

That may be a bit more than a single starting point but the idea here is to have fun and take advantage of the technology however it suits you. It may mean reading on the go, killing time with some games, uploading photos straight from your phone, or keeping on top of a busy schedule. Ultimately though it’s about making the technology work for you, and I continue to be impressed by the possibilites for this platform.

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I’ve previously written about Apple being a strong competitor to Nintendo’s mobile gaming darling, the DS. In today’s Apple Event about iPhone 3.0, some interesting tidbits came out that shed even more light on the situation.

Specifically, the announcement that over 30 million iPhone OS devices have been sold to date. This is a nice little nugget because Apple rarely itemizes sales figures by SKU. Typically iPhone sales are recorded as iPhones and iPod touches get lumped into the iPod category so there has been much speculation as to what the actual install base for iPhone OS is, and in turn, what the market size for mobile games and other apps is shaping up to be. Back in December, I said: “Assuming a conservative 10-15% of iPods sold are touches accounts for an additional 5 to 8 million gaming devices.” This is likely a bit low as end of year cumulative iPhone sales totaled 17.4M while as of today ‘over’ 30M iPhone OS’s have been sold.

At any rate, it’s now easier to see specifically how iPhone OS stacks up against the DS.

As you can see, the DS still clearly dominates. The iPhone OS however is making inroads and has now grown to around 30% the size of Nintendo’s with no signs of letting up.

With signs also pointing to the App Store becoming a billion dollar property, there’s even more reason for Nintendo to see Apple as a significant competitive threat.

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Following my post about digital formats threatening Blu-ray, the Pew Research Center has a report out indicating that the internet continues to make serious gains as a source for news compared to traditional outlets like television and newspapers.

The internet, which emerged this year as a leading source for campaign news, has now surpassed all other media except television as an outlet for national and international news.

Currently, 40% say they get most of their news about national and international issues from the internet, up from just 24% in September 2007. For the first time in a Pew survey, more people say they rely mostly on the internet for news than cite newspapers (35%).

The trend is especilaly strong amoung young people aged 18 – 29 with an equal number of people responding that the internet and television are their ‘main source’ for news.

For young people, however, the internet now rivals television as a main source of national and international news. Nearly six-in-ten Americans younger than 30 (59%) say they get most of their national and international news online; an identical percentage cites television.

I wasn’t surveyed but would have certainly responded that the internet was my primary source. For the last few months I’ve been subscribed to the NBC Nightly News podcast via iTunes, which provides the complete evening news program, without commercials, just hours after it’s broadcast. I’ll regularly flip this on over breakfast here in the UK, and watch the news from the night before.

Much of this is driven by the fact that we’re living in the UK and like to keep up on what’s happening in the US. The format however is the real driver, as it’s always available, on demand, and in high (enough) quality. Not to mention, there are hundreds of news podcasts to choose from depending on what you prefer to follow.

Podcasts in Front Row

I've set iTunes to keep the 5 most recent episodes. After that they're automatically deleted.

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It’s been a bit of a battle over the last few years but DRM-free music is finally here. Let’s recap:

~2006 and prior – Music industry can’t fathom the possability of DRM-Free music… it will be the end of the Industry.

Feb 2007 – Steve Jobs writes ‘Thoughts on Music‘.

The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store.

May 2007 – EMI (one of the ‘Big 4’) provides it’s entire music catalog to iTunes DRM-Free. Songs are available at a higher 256kbps quality and previously purchased tracks can be upgraded for the price difference (~$0.29/track) automatically.

June 2007 – iTunes surpasses Amazon and moves into the #3 spot for US music sales.

Sep 2007 – Amazon launches DRM-Free MP3 store with 2 million tracks including those from EMI and Universal . They later add Warner in Dec and Sony BMG in Jan 2008, thus becoming the first online store to offer DRM-Free music from the ‘Big 4’. Analysts believe this will loosen the grip of iTunes over the music industry.

Jan 2008 – iTunes becomes the #1 music retailer in the US, surpassing brick and mortar giants Best Buy and Walmart. Amazon remains in fourth with 6% market share.

Dec 2008 – Amazon is growing while physical CD sales slump, but still no rival to iTunes.

But Piper Jaffray financial analyst Gene Munster estimates that Amazon will sell 130 million tracks this year — a paltry sum compared with the 2.4 billion songs iTunes is expected to sell in 2008.

Yesterday – The Industry realizes, digital is where it’s at. Apple announces full iTunes catalog is going to iTunes Plus format. (DRM-Free, 256kbps, fully compatible with Mac/PC/iPod/Zune/Squeezecenter/etc). 8 million DRM-Free tracks available now. Remaining 2+ million coming by end of Q1.

Digital music is here to stay. Next up digital video.

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Let’s cut to the chase… the iPhone has been huge.

Plenty of smart people predicted it would be a flop either because they simply missed the mark, or perhaps more cynically, because they just didn’t want to believe it.

Well, in only 18 months it’s become clear that Apple is having a field day with the iPhone. They’ve smashed their 10M mark prediciton for CY08, the iPhone ranks highest in customer satisfaction according to J.D. Power and Associates, it is now outselling all Windows mobile phones combined and nipping at RIM’s heels, and Apple’s just getting started. So much for:

“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.” -Palm CEO Ed Colligan

Many have also noticed that Apple is making a BIG push on games as well, but I’m not sure the potential here has been fully understood. The iPhone isn’t simply transforming the mobile phone market, it’s expanding it to a mobile computing, mobile gaming, mobile web surfing, mobile just-about-anything-you-can-think-of market, and it’s going to be big.

Take the recent figures from NPD on gaming console sales. As usual, Arstechinca has a nice write up about the shear dominance of Nintendo in the market.

via Arstechnica

But what about the iPhone? Let’s take a look at how iPhone/iPod touch sales compare to the market dominating Nintendo DS. Conveniently, the sales figures for the DS were also much easier to come by.

We can take away a few key points from this:

  • Last quarter iPhone sales were on par with the DS.
  • iPhone sales are expected to continue to grow rapidly, far faster than the DS.
  • Add in sales of iPod touches as well and Nintendo suddenly has a force to reckon with. We can’t know the exact number for sure because Apple doesn’t breakdown iPod sales by model. However, assuming a conservative 10-15% of iPods sold are touches accounts for an additional 5 to 8 million gaming devices in peoples’ hands.

We’ll see what happens in the coming months but at this point Apple appears to have struck another chord, this time in gaming. The seamless integration of the App Store, iTunes, and device, coupled with the processing power, motion/touch control, over the air downloads, and location based services seems to have hit the mark.

As Arstechnica concluded “We’ve seen the future of gaming, and it is casual.” Quite frankly, this fits perfectly with gaming on the go with the iPhone & iPod touch.

For more reading, John Gruber has an excellent analysis and summary of Apple’s new “third leg” for the company.

Source data: iPod SalesDS Sales

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