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

Microsoft Surface - which use case ?

This week-end, I had the opportunity to test Microsoft Surface during "salon de l'éducation" (education fair) in Namur - Belgium. Microsoft Surface is a kind of large horizontal touch screen (30 inches) that you can lay on a table.

Touch events are detected through infrared, with the capability to capture a lot of simultaneous events and gestures. It's also possible to lay objects, leading to interactions through NFC or SRW.

The screen size yields quite high definition for pictures but the processor is strong enough to smoothly handle this (far better than IPad Mobile Safari for very large images ;-).

Touch detection and gestures were sometimes hazardous but this can probably be sorted out through more frequent usage (as it is for any new device, especially the touchscreen ones).

Demo applications were quite diverse:
- an interactive map,
- picture gallery,
- quite basic educative application,
- mind-mapping brainstorming application,
- weather forecast (as on all devices),- ...

At this early stage, the price is obviously irrelevant (>10000€). This depends on volume.

Some questions still resist to this demo:
- would people actually use this ?
- in which environment (home, office, hotel, school, restaurants, hospital, industry, war rooms, senior residence, etc...) will it be best applied ?
- for which kind of usage (learning, gaming, collaborative working, leisure, etc...) ?

Since demonstrated in a education fair, I guess some people imagine that small groups of children will interact around this table to learn together. A similar product - but far less powerful- was demonstrated by another vendor, apparently restricted for drawing usage.

Collaborative learning will certainly evolve and is a very nice topic to study. However, I'm not sure Microsoft Surface  (and its competitors) will play a massive role in this market.
As human beings, we naturally prefer to watch screens with at least 30° angle. Moreover, the size of the screen naturally limits number of persons who can interact. So I only see this as applicable for some restricted usages, preventing rapid significant price decrease.
Just feel free to contradict with good use cases !

Let's be fair. Even if this device would perhaps not have a bright future, let's recognize that Microsoft invested and contributed to explore this track, helping the world to progress on a very positive and promising topic.

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

Kinect - a first step to reconnect Microsoft with youngsters ?

Microsoft has announced a 240M$ writeoff in their last financial announcement due to KIN mobile phone project cancellation. What appears to be a huge amount for any company is just a drop in the ocean of Microsoft revenues.

This week, Global Equities Research analyst have downgraded the note of Microsoft, not for this writeoff but for what sits behind. Microsoft is losing ground on Office battlefield in education, public and call center sectors (which represent 10%). Moreover, companies more and more give the choice to employees to choose a MAC or a PC.

But the tough statement does not sit in immediate market share or price erosion. As outlined in a previous post, it's much more dangerous long term than short term. Analysts outlines the danger : "Microsoft is unable to connect with the new generation of users. This could cause problems down the road." KIN phone cancellation is just an additional proof point. Microsoft software appears as old-fashioned for youngsters.

But Microsoft is not yet dead. Thanks to huge cash and some current projects, Microsoft certainly can recover if they play the right card. This reconciliation card can be found in 3 packs : mobile, Internet and games.

In the area of game console, a commercial name - Kinect - has been assigned to the "Natal research project". Thanks to Kinect XBox add-on (yes, it works with an existing XBox), you can live a kind of Wii gaming experience without the need of a Wimote. First Kinect Games are announced before Christmas.

On the techno side, even if Kinect could be a huge technological step forward for visual movement detection, it lacks the vibration feedback proposed by game console accessories, Wimote and ... mobile phone games.

On the business side, Kinect still applies the old gaming business model - a game console partnering with top game editors. We address within another post the missed opportunity : a "Kinect app store" linked with a decent "Kinect developer program" for any developer to leverage the assets of this technological breakthrough.

Even if the experience is nice and movement detection accurate enough (still to be proven ...), this project can only be a first step. It will certainly not be sufficient to reconcile Microsoft with a generation. Still a long way to go for Steve Ballmer, much more in terms of mindset than in terms of technology, before Microsoft becomes hype within communities of digital natives.

To be continued ...

Benoit Quirynen

Racer mobile phone - the name of the winners not written in the press release

Racer, the new Android phone sold below symbolic threshold of 100 UK Pounds, produced by ZTE and distributed by 3-UK, has been announced this week. This is probably an important milestone in the mobile phone history. Funny enough, the name of the true winners is not written in the press releases.

The announcement indicates an important smart complementary offer; 3UK granting a volume data bucket of 150MB for top-up on a prepaid account.

3UK and ZTE are obviously mentioned in the press release.

Through this launch, 3UK, desperately tries to attack its strong competitors with an appealing offer for youngsters. Vodafone, T-Mobile/Orange and O2 are able to follow when they decide. If the phone is a success, it's just a question of months to come back to a similar balance between telco players on the island.

On the other hand, ZTE makes a step towards a position in the top-5 mobile phone manufacturers but there is still a long long way to run.

Funny enough, the name of the big winners of this important milestone is not written.

Android is mentioned but Google is not. Through its "free licensing model", Google will win the scale battle with Apple. Google copies the Windows model used by Microsoft against Apple during last century. Google does not directly produce cash through this kind of offer. But advertising inventory (display and search) will indirectly grow at an higher pace and this growth is directly linked to G revenues.

The name of the other winner is Facebook, with the same logic of increased inventory, since target of this phone is most probably youngsters, heavy Facebook users. This can be extended to myriad of mobile phone application providers.

Names of losers are rarely written in press releases.

We can not say that Apple will loose with this kind of move but it defines the borders of a profitable corner.
Apple, luxuriantly trapped by the very high value of his brand and its vertical approach - mandatory to change the game at the beginning but limiting the scale during next phases of growth -, will loose against Android in terms of mobile OS market share. As a consequence, iAds, advertising initiative from Apple, will then probably be restricted to high-end brands while Google presents a universal inventory for any brand, any shop.

This announcement now materializes another level of danger for Nokia. Lost in Symbian, Meego, Linux mobile OS announcements, Nokia is still the number one but does not manage to tease interest of developers for applications - the next criterion for people to buy a phone.

Moreover, the whole telco market could start to see ARPU (average revenue per user) declining faster at this stage. Through this offer with such a pricing for device and data, number of data users could reach a tipping point where messaging traffic could start to significantly migrate from charged SMS to free instant messaging.

This only if the Racer phone is good and is a commercial success.

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

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