WOW! RIM just fired a shot across Apple’s bow with the Playbook! This appears to be a wonderfully well thought out product and well positioned as a “professional grade” tablet. Given Apple’s dominance of the consumer position, this is throughly calculated move by RIM to remind people that they invented the Business Smartphone market and are intent of having a substantial voice in the Business Tablet market too. Nicely done!
The OLPC Tablet: They could probably sell a lot of these in the developed world. Kids in the US need this every bit as much as kids abroad do.
NYT and others charging for content?
I’ll be frank… I really don’t think media companies charging for content is the way to go. Let’s look at why:
One of the things that made iTunes and other music download services great is that they allowed people to purchase an individual song as opposed to an entire record. People don’t mind paying for something they value, but they don’t like paying for other stuff they don’t value. Up until that point, consumers had to “take the good with the bad” and so many either begrudgingly bought the album just for a single song, while others passed on the album even though they wanted a song on it.
Another thing that made iTunes a success was that Steve Jobs (correctly) estimated that the hassle factor of illegally downloading a song was more expensive then a song priced at $0.99. And he was right. The iTunes model has proven definitively that most people are willing to pay a small amount of money for something of value, even when free versions exist, if the paid version is more convenient/fun to own. With news content, the free version is the norm not the exception, and the convenience/fun factor is missing from the ownership experience. As such, it’s unlikely that people would be willing to pay for content since it’s likely available for free elsewhere without much hassle.
In order to change this reality, the news companies are going to have to develop differentiated content. CBS’ 60 Minutes is a good example of this idea as their content and investigative journalism style is unique among news sources. The more that news companies can differentiate themselves in similar fashion, the more they’ll have the ability to charge for content. Barring that, I predict that most paid models will not ultimately succeed.
The dude showing this is a little cheesy (make that really cheesy), but the hybrid design is pretty cool. The guy mentions that you can browse through your CD’s… CD’s!!! who has a CD these days? All told, this is a good first product, but you’d like to see them improve the tablet user interface and sell both components independently so you could upgrade it modularly as needed.
Apple would never build something like this because it’s not elegant enough of a solution; however, the design has some advantages such as making it possible to get a true tablet experience along with a regular notebook experience.
John Siracusa of Ars Technica has written a compelling post on why the hype over the tablet is overblown with regard to its technical capabilities, and why we aren’t likely to be blown away on that front.
The biggest reason John is right is that many of the futuristic ideas being written about ignore the wisdom of versioning strategy. Sure, some of them will make it into the product eventually, but they likely won’t (and should not) be in version 1.0
When developing the iPhone, Apple had a lot of the ideas that didn’t make it into the initial version. If they had wanted to, Apple probably could have released the iPhone with the App store from the beginning. But just because you can do something technologically doesn’t mean you should. The market needs to be ready to understand and assign value that technical achievement in order for it to succeed (in order for people to buy). Even if Apple had the technical capacity to release the app store then, it wouldn’t have made sense strategically because the market was not yet ready for it, and needed time to absorb the rest of the iPhone capabilities first. So Apple waited until the following year, and by then the market understood iPhone 1.0 and was ready for the 2.0 version
With most technology products, it takes a while for the market to absorb the new ideas and functionality. If a manufacturer includes too much stuff in a new version, the market tends to get confused. Confusion over what a product is supposed to do (its value proposition) is the leading reason that people choose not to buy: they don’t get why they should want or need it.
Apple is masterful at making sure that its audience—consumers and the consumer media—gets it. By that I mean that these constituencies are able to digest and understand why they should want or need the product. In the case of the tablet, while some of the ideas being put forth are certainly interesting, they might simply be too much too soon. The market first needs to absorb version 1.0 of the tablet before it can be ready to absorb versions 2.0 and 3.0.
Best line from the article, “There is the very real possibility that this could be Jobs’ last major new product launch… Does anyone really think Jobs is going to go out betting on a niche product? No.”
I agree with John Gruber’s post… “I think The Tablet is nothing short of Apple’s reconception of personal computing.”
Hardware accessories: A huge market for the tablet
There have certainly been some hardware accessories for the iPhone, but most have come in the form of cases, a few of which have extra batteries or a credit card reader. The problem with hardware accessories for iPhone is most get in the way of what most people use the phone for primarily: talking. After all, it is called iPhone.
The tablet will be different. Since its not intended to be a device you talk on (though I suspect people will hook it up to VOIP apps like Skype and use a bluetooth headset to do just that), the annoyance factor of adding a hardware accessory will be lower. People won’t be trying to stuff the device in a pocket or purse and it likely won’t be going all the places your phone goes (which for most people is everywhere they go).
This opens up a nearly infinite world of possibilities and I suspect we’ll see all sorts of hardware accessories you would never have imagined. Whereas the iPhone was marked by the success of the App store, I suspect the tablet will be marked by the success of hardware accessories (and apps too of course).
Some possibilities include:
- a tripod to take video (or at least an attachement to use it with existing tripods)
- a stand with a movable arm that allows you to move the tablet into and out of the way when necessary (similar to architect’s desk lamps)
- a mount for attaching the tablet in your car
- a stand for your desktop (which may even include an additional battery within it).
- a handle so you can easily carry the tablet around
- a stylus for writing on the tablet
- a case with extra battery power (iPhone obviously already has this but it’ll be even better for the tablet)
Apple Tablet Strategy: Replace your existing hardware
There has been much debate on the question of “why does anyone need a bigger iPhone?”
Many have opined that the tablet will just be a bigger iPhone and in that view they find it hard to justify why they would need such a device. Apple has obviously considered all this too. Steve Jobs is rumored to have twice killed the tablet project for this reason, along the way asking “what use does this have other then browsing the internet while you’re on the shitter?” (paraphrased).
I think the strategy Apple is pursuing is a lot bolder then simply a bigger iPhone. I think they’re looking at all the devices we currently have in our homes, cars, offices and other places we spend time and asking themselves which of those hardware products can be replaced or made more effective by pairing it with a device like the tablet.
Examples of such hardware include:
- Home and office phones
- TV remotes & universal remotes
- Digital picture frames
- Retail point of sale systems
- The screen on your printer/copier/fax machine
- Thermostats and climate control systems
- Your car’s infotainment system
- Home security systems
- Consumer video cameras
- Small televisions
- Lighting control systems
I think the vision here is that the tablet could work with or replace a lot of this stuff.
- Imagine for a minute that you could simply pick up your tablet and adjust the thermostat in your house, or set your security system or control the lighting
- Imagine you could control your TV and other A/V equipment without having multiple remotes lying around.
- Imagine if you could cook dinner while watching a video on your tablet of how to make the dish.
- Imagine you could read digital magazines and actually get a similar experience that the paper based versions produce.
When you really think about it, there are a lot of gadgets and gizmos lying around most people’s houses, cars, and workplaces, and most of those feature bad software that offers poor user experiences.
The biggest lesson the iPhone taught us was that demand exists for a lot of very diverse applications to fill specific niches, few of which are large enough on their own to justify a dedicated device. The brilliance on Apple’s part was building a device and a development ecosystem that allowed those diverse applications to be constructed by others and to come together on one platform that we all carry in our pocket. This led to a shared development cost, an insanely rapid development of niche applications and a far better user experience for those applications. The results of this strategy have been overwhelming.
I predict that Apple’s tablet strategy will follow this model. It will rely on creating a hardware device that has a few specific uses that Apple will define and then Apple is going to rely on the developer community to produce applications that fit the varied uses that people will think up.
For Apple’s part, the leading application the company is likely to target in my opinion is magazine and book reading since this activity fits with the iTunes model extremely well and is a market desperately looking for innovation and new forms of monetization. I expect we’ll see some form of generic pricing of magazines (something like $1.99 per issue or $9.99 a year for 12 issues feels right). Publishers are going to begin shifting their production focus to the tablet in large numbers and as revenue begins to come in from that source, we’ll see news stand magazine prices increase steadily to make up for the decreased sales volume.
If this is indeed where the marketing focus is, you can be sure that Apple will have spent exhaustive amounts of time perfecting the user’s reading experience. It will be something totally new and will blow us away by its sheer elegance and simplicity.
the Apple tablet just looked like a bigger iPhone, with a 10.1-inch multi-touch screen, and awesome user interface, and it combines the functions of a netbook and a kindle, coming with 3D technology, virtual keyboard,video conferencing, e-reader, netbook features. The Apple tablet would sell at a price of less than one thousand dollars, and Apple was planning to produce 10 millions units of this tablet at the first year.
“Frakin Cool!” This concept video from Sports Illustrated shows how much better the user experience would be if we could read magazines on the tablet.
Prediction: The Apple Tablet, assuming it isn’t entirely vaporware, will become just as large of a business for Apple as the iPhone.
It’s going to be a lot more then just a web browsing device. Apple doesn’t build products that compete in categories, they try to define categories or create new ones. The Tablet will be the latter, and will facilitate Apple’s disruption of mutiple markets and existing product lines.
I brainstormed a lot of use cases for the Tablet the other day and the possibilities are really exciting. The big take away is this: there was already a smartphone market with dominant competitors (BlackBerry for the most part) prior to the iPhone, yet Apple’s entrance both grew the overall market and allowed it to achieve significant market share gains within the market.
The tablet market is similar but there is no 800 lb gorilla like RIM (BlackBerry). This matters because Apple will not have to build market share by taking it from someone else. It can define the category on its own terms without having to undo previous category definitions generated by others.
Lack of a comparable product does have the drawback of requiring Apple to do more consumer education, but when you think about the company’s marketing strong suit, educating the consumer, this clearly works in their favor. On balance, the opportunity is more substantial because Apple can define exactly what a Tablet device is and should be, and undoubtedly will do so in a way that leverages all of the companies existing technology assets.
If they ever release this thing, it’s going to be cool… guaranteed!
Apple Tablet Use Cases
People have been speculating for a while on what someone would want a tablet computer for and how they would use it. While considering those questions, I put together a list of use cases. It should be noted that this list is purely speculation and in many cases wishful thinking. Having said that, the exercise of brainstorming these use cases helped clarify exactly the business opportunity the tablet represents and why people are so excited about the potential.
Mobile Internet Surfing
- Living room
- Bedroom or hospital bed
- Kitchen (to look up recipes and view demonstrations)
- Desktop VOIP phone (utilizing a stand and maybe a bluetooth headset) with video calling
- Basic video editing (like in iPhone and Quicktime)
- Drawing surface for artistic software
- Digital picture frame
- Document review, digital signing and sending
- Doctors and nurses taking down patient notes
- Classroom (students taking notes, making flash cards, recording lectures)
- Business meetings
- notepad for handwritten notes
- Infotainment system for car; GPS navigation, etc.
- Screen to control external devices and car hardware
- hotel personnel visiting rooms (housekeepers, managers, etc)
- Mobile POS system
- Augmented reality device
- Handheld maps
- Guided museum tours
- Sports playbook
- Sports statistics aggregation
- Real estate agents showing houses or buildings
- Architects demoing the finished product
- eReader for books, magazines, etc
- Bathroom/kitchen/mobile tv
- Kiosks at a conference
- Video camera
- Hikers navigating using the map/gps
- Instruction manuals for operating electronic devices, assembling furniture (think Ikea), etc
This is a beginning of a 10-year shift in computing, Everything that can possibly be done on a hand-held will be done on a hand-held.
Danny Shader in March of 2006 when he was the chief executive of Good Technology - Detractors of BlackBerry See Trouble Past Patents - New York Times (via hiten)
Agreed… and I would add that the “handheld” is not just your smartphone, but will also be the tablet, your watch, etc. Essentially, the point is that computing needs are becoming is increasingly tied to mobility. As a result, the growth in computing in the next 10 years will be in devices that are portable, pocketable, wearable or even *gasp* implantable.
Chrome OS will be your TV’s operating system
The talk of convergence between the TV and the computer has existed for decades. Currently, there are two problems preventing this blending of technology: the TV does not have a native PC operating system AND most people use cable (or satellite) boxes to connect to content. The latter come with their own operating systems (which are pretty bad), eliminating much of the need for a native system within the TV. Even for consumers who hook up their TV’s to nettop computers, the user experience leaves a lot to be desired because you can only use one input (nettop OR cable box, but not both) at a time. Finally, the business case for convergence fails because of the requisite cost of including Microsoft’s operating system within a TV.
But Google’s Chrome OS may be about to change that. For one thing, Chrome OS is open source and does not require another operating system like Windows to run on top of (which Boxee, Jaman, and countless other TV applications do). To be clear, including Chrome OS within a TV would involve additional costs of manufacturing to include the necessary hardware to support full PC uses, but given Chrome OS’s substantial dependence on the cloud and targeting of netbook computers which represent the lower end of PC hardware, these cost increases are likely to be manageable.
As such, it will be economical for manufacturers to bundle Chrome OS within their TV’s (think of it as building a very large tablet PC), especially as doing so opens up the opportunity for additional monetization.
The digital TV space has become a low-margin commodity business. Efforts at charging premium prices have largely been tied to increased resolution, contrast ratios and other aspects of technical superiority. Yet consumers are largely ignorant of the marginal benefits offered by such technology and unwilling to pay premium prices for these technologies when lower-priced products without them appear to be “good enough.” By including the PC operating system within the TV, the manufacturers would be able to market the internet connectedness of their products (which they currently do not because they do not control enough of the value chain) and to charge a premium price for such products. Whereas most consumers have been unwilling to pay for resolution and higher contrast ratios, most consumers would be willing to pay extra to get the internet on their TV.
Better User Experience
Even though it’s technically possible to get the internet on your television, this capability is far from a mass market idea because the user experience is terrible. It requires a decent level of technical know-how and troubleshooting (particularly in display settings) to get everything set up and make it work. The inclusion of a PC operating system within the TV by the manufacturer would likely eliminate much of this leading to a dramatically better user experience. A good analogy here is using the internet on a mobile device prior to the iPhone: yes you could do it, but the experience was so bad that many people did not. Once the user experience improved, the numbers of people accessing the internet from smartphones dramatically increased.
The Tablet Market
Google rightly points out that for most people internet use is the leading activity on a computer, and this fact serves as the basis for the company’s development of Chrome OS. Much of the use-case for the tablet PC (including the CrunchPad and the iTablet) surrounds using the device in a living room setting when consumers are not in front of their computer and want something larger to interact with other then their phone. If consumers can use Chrome OS on their TV’s to connect to the internet, a leading use-case for the tablet will be effectively addressed by a different device that already exists in most living rooms, dramatically reducing the overall potential of the tablet segment. At the end of the day, most consumers would rather have a TV than a Tablet.
A Cheaper TV
Google already sells TV advertising but the product has always been the red-headed step-child to the much more expansive web advertising program AdWords. With Chrome OS on the TV, Google will have a huge opportunity to leverage its substantial advertising platform in the exact environment that people are most familar with consuming advertising: while watching television. In order to force the issue and compel purchase of these new TV’s, Google could work with TV manufacturers to subsidize the cost of the TV making them cheaper for consumers. The strategy is that by enabling the internet on the TV, more people would be performing Google searches, thereby bringing additional revenue to the company. It fits with the company’s stated strategy of “the more internet connected devices, the better.”
The need for a UI suitable for the TV
The one glaring omission in a TV strategy is Chrome OS’s GUI. As demoed, it appears optimized to run on netbook and laptop size screens. Obviously, Google or someone else would need to develop a better UI for people to use while watching TV. The challenge here is that Chrome OS is merely intended to connect to the internet, and does not allow installation of any native applications preventing applications like Boxee, Jaman from filling this void. Thus, whatever UI is developed will need to run as a web app OR Google will have to choose to allow native apps on Chrome OS.
Chrome OS is initially intended for the netbook segment, and while that may be the entry point into the market, I would wager that the TV segment will end up being a more lucrative one for Google and Chrome OS in the long run. People are already familiar with using a computer to connect to the internet, so users of Chrome OS will largely be engaging in activity that they likely would have done on a different device anyway. However, there is little precedent for using the internet while watching TV due to the difficulties already discussed. With Chrome OS running on your TV, Google will be able to convert TV watching into an internet-enabled activity where people are searching for content and consuming advertising as they do so, all of which generates revenue for Google.