IPad 2 - price points are set for competitors

Today, Steve Jobs announced the IPad 2, the feature list and the prices for the new device.

The main features are sitting in the engine, except the so expected cameras (front and back) that are now on board. But the most important part is the price which stays the same.

This now shapes the market for till end of 2011.
No one can sell a successful tablet more expensive than IPad 2. The only reason buying another tablet than IPad 2 is a lower price.
Let's make a tour of the challenged tablet vendors:
- Motorola Xoom equiped with Android : similar feature set as IPad 2, probably less powerful CPU, certainly poorer batteries and higher price. This one is xoomed to fail.
- RIM Playbook : poorer features, probably less powerful CPU, certainly poorer batteries, same prices as IPad 2. They can perhaps survive focusing on corporate market but it will be bloody challenging and they will eat their margin anyway through rebates on volume based deals.
- Samsung Galaxy : Samsung announced a 10.1 inch in MWC and will announce a 8.9 inch at CTIA end of March. Since Samsung did not yet publish any price, they still get a chance.

Let's take the positive angle. What could be a competitor of IPad 2?
- a device in the range of 300$ or 300€,
- 9 inches minimum,
- a USB able to plug any USB webcam,
- a USB able to plug any USB dongle, even 3G/4G,
- decent screen (could be less robust),
- decent CPU (even slower than IPad),
- WiFi only,
- Android 3.0 Honeycomb on board.

If nobody shows up, IPad 2 will have 90% market share at the end of 2011.
This will strengthen their domination of which they often abuse.

Who'll be the first ? Medion, ASUS, an EEETablet, Samsung, LG, Nokia (just kidding for the last one).

Future will say.

Benoit

AOL acquires The Huffington Post - capitalism against illusion of freedom

AOL has acquired this week The Huffington Post for $315 millions.

The Huffington Post is a kind of newspaper written by citizen bloggers. AOL expects to sell ad space around what became a popular real estate. As outlined in The Herald Tribune by David Carr, it's funny to see that all these bloggers have created value for Miss Arianna Huffington.

A lot of this content is created by citizens, inspired from other articles in paid newspaper (as this one ;-). Before acquisition, it was difficult to attack a company with no fund. Tomorrow, shooting for the 2.2 $B from AOL market capitalization risks to tease a lot of content providers willing to protect their assets and value their content.

Moreover, now that citizen bloggers know they directly feed advertising revenues of AOL through their posts, they will perhaps not demonstrate the same appetite to contribute ... at least on this particular real estate. Of course, AOL can pay the best contributors but the relationship then becomes commercial with a totally different mindset.

On the other hand, will readers continue to absorb this content the same way since the spirit has evolved ?

Anyway, this move is the demonstration of capitalism against feeling of freedom. And the most cynical is not AOL which pays money but Ms Arianna Huffington who receives money valuing the efforts from a lot of others.

Will citizen bloggers go on supporting this attitude ? Will readers change their behavior ? It's a good test for our whole society.
Future will say.

Benoit Quirynen

IPad2 - will definition be twice higher ?

Some rumours about IPad2 state that the screen definition would be twice higher, becoming 2048x1536 instead of 1024x768.

Today, the Wired magazine on IPad already consumes more than 500MB in terms of bandwidth and disk size. Since Wired is often leveraging the full capacity, this could lead to a severe increase (media assets - image and video - take the larger part) in bandwith consumption (for consumers and/or for telcos) as well as on-device disk space (up to 2GB).

All this would only opertae if Apple manages to keep convincing publishers using its tablet after having sucked the customer relationship - as announced on Friday.

To be continued ...

Benoit Quirynen

Print publishers - it's time for a Copernican revolution

Today, we see a lot of print publishers willing to leverage IPad interactive capabilities to better monetize their assets. Since paper is currently their main source of revenue, they thus study how they could extend their IT systems and processes with minimal impact to deliver interactive experience.

Experience proves that adding interactivity along the way is complex and painful, often requiring manual costly processes. For a future-safe approach, publishers should consider redesigning their whole IT, taking digital and interactive as the source and "passive paper" as one of the multiple and diverse outputs.

Some of them already started this move in to adopt to the online space. It's only the beginning. This definitely requires a "Copernican revolution" and related change management processes to move the whole company in 21st century.

Thanks to evolutions during the last decade in this domain, by both industries and open source, this investment will make it much more cost effective and seamless for introduction of new formats and extension to new devices.
Having "rock-bottom" costs for the production factory can leave the money on the long run to either attract top writers and bloggers, bringing the right audience and/or give flexibility to evolve in terms of business model.

Yesterday, moving in the new space was an opportunity. Tomorrow, keeping current methods will yield a threat.

Are "Print publishers" ready for this change ? Future will say.

To be continued

Benoit Quirynen

Content is king, cross-device digital rights is key ... for e-paper as well

The limited number of e-books available on IPad pushed me to install Amazon Kindle app on this device.
In my humble opinion, IBooks reading experience is better but reading Winnie-the-Pooh starts to be boring ;-)

Moreover, thanks to Amazon, I can choose to read it on several of my devices where Kindle app could installed (IPad, IPhone, PC, Android systems, etc...). Even if reading a book on a phone is not convenient at all, at least I feel that my digital rights are respected. If I loose or break my IPad and wants to buy back a Samsung tablet equipped with Android, I'll have access to my library of e-books.

Cross-device digital rights is a MUST HAVE for publishers moving to digital world. Apple can not lock readers to his devices using content created by others. It tried it in the past with music. It had to extend afterwards to deliver MP3 versions of music.

You will argue that I could read some books on iBooks and some others on Kindle. And you are right. But today, in my mind, I can accommodate the user experience of Kindle and prefer to have future-safe digital rights. So next time, I'll first search on Kindle.

For newspaper, I also experience the "content is king" assertion. I subscribed to a newspaper quite limited application - even painful from a user experience point-of-view. However, I renewed my subscription to keep access to the content which I find useful.
On the side of cross-device digital rights, I'm blocked. Even if I have a subscription on my IPad, I can not read it through my Android phone. I consider this as unacceptable since I already paid for accessing this content.

When will iBook be open, when will newspaper support cross-device digital rights ?
To be continued ...

Benoit Quirynen

IPad and elderly - magic device contributing to reduce Digital divide ?

In the series, what can you do with an IPad, here is a small funny video (thanks Pascal !). Beyond this funny marriage between IPad and Velcro, I also made some experience, leaving the beast in the hands of elderly.
It's just incredible ! This is neither a quantitative study nor a qualitative one. No statistical value - just feedback. Even 70+, reluctant to use Internet, started to naturally browse with the device. Reading a book was perceived as pleasant, especially since you can increase the font size. They managed to write an email (an address, a subject, a text) and read other ones. Gestures were perceived as very natural. Watching video was also nice but will not replace TV screen - too small for long period of time. Photos were naturally appreciated, not only due to the device but also due to the persons appearing on pictures.

As you see, no complain about lack of video camera, USB ports or slots for memory cards as you can expect ;-) The single negative comment was about the wastage - the back of the page you turn in iBooks is white. Apple could have printed both sides of pages. What a wastage of paper !

A study published in France states that 85% of persons who want to buy an IPad don't know the capabilities and have no idea about what they will actually do when they'll receive it. Funny to see that persons who don't necessarily want an IPad know how they would make use of it. A special kind of "Digital divide".

Just try out and share with us what you observe.
To be continued ...

Benoit

Steve Jobs has broken a thermometer. Who will offer a new, more reliable, reference ?

During last 2 years, analysts presented a lot of reports about mobile Internet usage based on AdMob public reports. Now that AdMob is thrown away from iPhone, what will be the new reference ? GSMA has a unique opportunity to take a position.

AdMob is regularly reporting Mobile Internet traffic trends for the mobile sites - traffic per device manufacturer, per country, etc... - based on measurements on mobile sites where it delivers banner ads. The last part of the sentence is important because it naturally brings a bias to the statistics. AdMob mainly delivers banner ads for small mobile Internet websites, typically with an insufficient size to maintain an internal advertising agency.

Typically, since AdMob has a very low footprint on main mobile service provider portals (Orange World, Vodafone Live or Vodafone 360) or on successful internet sites (flickR, yahoo, Google, news, etc...), these reports were probably minimizing the mobile Internet traffic generated through feature phones (Nokia, Sony Ericsson, Samsung, Lg). Typically, due to broader "phone designed content" and/or preferential tariff, owners of feature phones were more used to crawl telco and well-known portals. This possible bias did not prevent analysts to create expensive reports from this free input.

Does this create a small or a tremendous bias ? Nobody knows the exact relevance of these reports in the past. But these reports will for sure loose any value for next issues, now that AdMob, on one hand, has been acquired by Google - a mobile OS vendor - and, on the other hand, will be prevented to deliver ads on iPhone.

So, through these drastic T&Cs, Steve Jobs has broken a thermometer. There is now a need for a new reference. GSMA could certainly become this reference.

Association of mobile service providers could aggregate local reports collected by all their members, measuring traffic in the network, on the neutral path between device and mobile web site. Perhaps these reports (aggregated measurements !) already exist but they are then published with a serious lack of impact. Mobile service providers could play the role of neutral party, providing totally unbiased reports, guiding the whole industry : device manufacturers, web designers, application developers and even end-users in the choice for an efficient phone. These measurements could even be monetized through more advanced reports sold to large Internet players, specialized analyst offices or governments willing to measure "digital divide".

Moreover, at the contrary of some other available measurements created in some countries (ComScore, Nielsen, national advertising associations, etc...), mainly done for advertising purpose, these GSMA measurements would also measure traffic on "ad free" sites.

Will the community of mobile service providers take this unique opportunity to become a reference or will they leave other players become a reference in their own garden ?

To be continued ...

Benoit Quirynen

IPad - not sure paper will disappear tomorrow

For 4 months, due to IPad, we read a lot of information about newspapers and magazines moving digital. Notepod creatively surfs on the wave the other direction ... Nice idea !

Notepod proposes block of sheets of paper with IPad and IPod format/dimensions so that designer can sketch screens at 1:1 scale, reducing the risk for bad design.

Paper probably stays for a while the best medium when you design a screen alone or with your colleagues around a physical table.

We will see how much time this "while" will stay.
To be continued ...

Benoit Quirynen

IPad 3G & impacts for mobile service providers

IPad 3G will force mobile service providers to rethink some of their mobile Internet offerings or face huge number of complaints reaching their customer care. User experience has a volume cost.

Beside the known impact of IPad for mobile service providers with the need to support micro SIM cards - the single format supported by the magic device, another phenomenon touches volume and bandwidth consumption.

Today, we see two different trends in terms of Mobile Internet offerings on the two sides of Atlantic ocean. On one hand, we see in Europe mobile service providers extending their offering towards unlimited offers (however never truly unlimited). On the other hand, AT&T and Verizon start to limit the previously true unlimited.

IPad creates a higher demand in terms of volume and bandwidth. As an intermediate device between PC and mobile, offering an incredible browsing & multimedia user experience, IPad requires HD websites, increases consumption of pictures and videos (Facebook, Picasa, Youtube, etc...). It's just another scale compared with "pocket size" devices.
Moreover, footprint of IPad applications is exploding. Wired magazine, presented end May, offers a very nice magazine but the price to pay, beyond the app store price, is the download of about 500 MB - yes half a gigabyte. BMW also offers a very nice free magazine, containing beautiful pictures and very design layout, but requires download of 157 MB. Each page is a high definition picture.

We can thus guess that a 2GB offering per month will be the bear minimum for an IPad 3G consumption. Or consumers will have to quickly figure out, before their first bill, that they primarily should download applications and consume Internet through home WiFi networks.
If telecom service providers do not adapt their offerings and do not warn consumers to take care of their IPad usage (through a continuous monitoring of the "connectivity icon"), this could lead to severe increase of complaints - as it happened for iPhone bought without special subscriptions.

On the other hand, Apple would probably be nicely inspired to add some settings describing "connectivity subscriptions" within its IPad in order to suggest correct "connectivity behavior" for the benefit of their customers.

Some will say that it's only a transient situation because everything will be "always-on". This however probably requires an evolution of business model to finance LTE networks and scarce spectrum resources or Femto equipments. And it's only the beginning since iPhone 4 also comes with a better screen.

The answer to the question "who will pay for the volume ?" is quite easy : "obviously the consumer !". The actual questions are more "who will charge for the volume ?", "will this volume cost be disguised or not for the consumer ?"
To be continued ...

Benoit Quirynen

Steve Jobs and the publishers

With the creation of the famous IPad tablet, Steve Jobs gives an incredible opportunity to press industry. This industry must certainly leverage the power of these devices but does not need to give all the power to the enlighten despot.

"Steve Jobs and the publishers". It sounds as the name of a rock band but it's not. It's the title of the story that we live for a few months.

Early January, CES Las Vegas, all device manufacturers were announcing their E-reader devices, all more black or white than the neighbor. All these devices would bring a revolution to press and book industry. Amazon was considered as a king based on Kindle sales figures : about 2 millions pieces everywhere in US in about 2 years.

Device manufacturers were proud of capabilities of their devices but a bit worried about info leakages or rumors around next Apple announcements. All device manufacturers were present ? There was only one missing : Apple. But Apple is not only a device manufacturer. It's a dream factory. They play at another level.

A few weeks later, Steve Jobs announced the IPad device and was demonstrating it, reading a newspaper in the sofa. Then, as usual with new devices from Apple, started an unbelievable hype period where press world has been shaken. One company announcing an IPad version of its magazine every week. Model was clear for Steve Jobs. As an angel saving press industry, he deserves a sales commission of 30% on all sales as it happens for music on iTunes.

Then came announcement of Murdoch - the pope of the English written press through NewsCorp religion : Washington Post news would not be bought through Apple but readers would download a free app and pay for news usage within the app, not through Apple. Moreover, the app proposed a better user experience than New York Times - the preferred magazine of Steve - proposed through Apple.

During April and May, a lot of magazines have published their specific app to deliver content : some of them copying Murdoch model - bypassing Apple.

Steve Jobs publicly demonstrated his disappointment in front of such low loyalty from the ones he is willing to save. Steve jobs behaves as an exclusive guy. Either you are his friend and he will help you, taking an important part of your money or you become his enemy. He creates new kingdoms but wants to rule these kingdoms in all dimensions, behaving a bit as Louis XIV "le roi soleil" - playing enlighten despotism. This kind of "no compromise" attitude is definitely a key success factor when designing best products. It does not necessarily help in all aspects of business.

All polemics last months about its ruling of app store - latest one about definition of "independent advertising aggregation" (commented here) - prove that the despotism, even if enlighten, starts to federate a lot of enemies which will be ready to jump supporting Apple competitors as soon as they have recovered.

Everyone wants his devices but not under his tough conditions.

When will these competitors be ready ? Will these be smart enough to take benefit of this perceived despotism ? Will Steve smoothen his positions ?

To be continued ...

Benoit Quirynen

Apple versus Google : the battlefield behind the last keynote

Last Monday, THE pope of communication presented the next episode of world's media religion. Behind the official announcements, Steve Jobs has left a few mines in the way of his old friend but definite current Google enemy. What are these mines ?

During last keynote of Apple last Monday, June, 7th, Steve Jobs presented the iPhone 4 and iOS4, the new version of the Apple mobile operating system. Brilliant as usual, Mr Steve sold us the new version of his "more than smart" phone, a marvelous assembly of technology to make the product, not just a bit better but simply the best on earth. But this new announcement also reveals other versions of other products. Less visibility does not mean less impact.

Of course iOS4, new name and new version of iPhone Operating System, becomes multi-task and thus recovers Android on this side.

It's now time for Safari 5 with some interesting features presented here. This new release of the browser contains a few dangerous mines for his fierce competitor Google.

And surprisingly, some of these mines have been set in cooperation with old enemy Microsoft. This new version of Safari is optimized to make use of hardware accelerator of Windows. Yes, you don't dream. Steve Jobs forgives Microsoft about the old OS battle between MAC OS and Windows. Moreover, Safari 5 is now enhanced with Bing search build-in in the smart search field. And 20% of "Safari new feature" page is eaten by a "Bing screen". An "hibernatus" frozen in early 90's could not believe it.

Beyond agreements with old Microsoft enemy to fight the new Google enemy, Apple proposes the top of the browsers for developers. Thanks to new smooth and nice effects supported through evolution of standard HTML5, developers have the possibility to redesign websites to bring user experience the next level. This evolution also mines the way of Adobe Flash. The set "Javascript + HTML5 + CSS3", by default embedded in the browser, dangerously recovers flash capabilities. Developers also get the possibility to develop extensions and to benefit from a better "Web inspector" debugging tool.

More important in the war for consumer eyeballs, these Safari 5 enhancements will also please consumers.

And when Google, a few years ago, presented Chrome as the fastest browser in the world, Steve Jobs could not accept a defeat on the user experience side. Safari 5 not only now proposes a large pallet of rich media capabilities to consumer. It also embeds the mechanic to improve speed and become fastest browser, through DNS caching and evolutions of Nitro Javascript engine.

Thanks to Safari reader, reading articles also becomes a pleasure, removing distracting "Christmas tree ads" proposed inline with content. If spread as a feature in other browser, this one can hurt Google Display revenues (mainly flowing through DoubleClick). On this one, Google will not be the single player to be hurt. This could also lead to collateral damages for publishers, these currently collecting this way small but critical revenues during this crisis period. We come back on that matter in this post.

Now that Google is fighting Apple on Mobile OS, Apple also positions its browser in the battlefield. Lousy Microsoft, through his slow and proprietary developments of Internet Explorer, has opened the door for new entrants. A browser is the critical entry door to consumer universe.

Through this Safari 5, Steve Jobs now tries to recover Chrome. It's not a minor evolution. Even release numbering scheme suggests this release as a major evolution (moving from Safari 4.0.x to 5.0.x).

But mines are not only positioned on the technical or functional areas of the battlefield. As we all know, Steve Jobs also sets his own strict conditions in the T&Cs for developers. And article 3.3.9 is actually an even more dangerous mine for Google. This section restricts developers to only transfer user information, with prior user consent, to independent advertising partners. An independent advertising partner, according to Apple's terms, is a partner which does not develop mobile operating system or mobile devices. In other words, since Google develops Android as the open mobile operating system, Google may not leverage any more its latest major acquisition AdMob (just blessed by FCC). AdMob was the leader in promising mobile advertising on iPhone. Through this Apple restriction, this November, 9th Google acquisition for $750M could turn to be a pure loss. AdMob has been acquired for the inventory and dominant position on iPhone, not for his technology. And Apple announces that he will become a significant player in the advertising display business through iAds. Still a long way to run on this side however.

The war for consumer eyeballs on connected device has rarely be so fierce. Eyeball generate revenues from a mix of hardware devices, software apps, content and advertising. Through latest evolutions, Apple and Steve Jobs attack on all these dimensions. Thanks to "coopetition" with Microsoft, Apple is now positioned as a rich browser to be taken into account on all devices, including PC. It offers a multi-task mobile operating system supporting competition from Android on mobile handset front. And Steve Jobs even transforms Apple into an advertising company, leveraging rich interactive mobile display capabilities of its new successful IPad tablet and on his iPhone jewelry.

Search engine and social networks are the only main missing weapon in Steve Jobs' current arsenal.

Does he need it ? When is the next major acquisition ?
To be continued ...

Benoit