Friday, January 29, 2010

Me, the Australian Macworld Podcast and why everyone missed the point

OK Mac fanboys, the dust has settled so I can now begin to talk turkey on the UberTablet blog. I mean, can I really call this the UberTablet blog without facing the new reality of Apple releasing a Tablet which intentionally helps make Tablet mainstream? No!

If you can’t be bothered reading feel free to catch my thoughts on today’s Australian Macworld Podcast (edpisode 19). Today I was interviewed by no less than four media sources about the iPad and its possible effects on the current Tablet landscape. My initial reaction after the launch was one of relief, given Apple could have landed the potential knockout punch to change the current Tablet landscape forever. Then as the dust settled I began to realise just how calculated, conniving and clever Apple is.

I could begin by mentioning what I don’t like about the iPad, but that would make me look silly and perhaps too cliché for someone who has spent most their adult life working with Microsoft Tablets (and now we need to make distinctions about what Tablet fence we sit on). What I would like to discuss however is why Apple released the Tablet they did, and not the one everyone was waiting for!

Reality is that Apple are a double-edged sword which rely on a very tactful cooperation between their hardware engineering team (in this case the guys that made the iPad and the new A4 Processor) and their software engineers (the one’s that hacked up the iPhone OS and threw it on a 9” display). Between the two they provide the richness in experience the PC world can only dream of and if you add the might of Apple marketing people then you have an equation for PC devastation. So why is there all this sense of disappointment in the air?!?

The reality is this…Apple did not make the iPad for the people, Apple made the people for the iPad!!!

If you're not already aware, Apple is doing everything in their absolute power to drive users to their three main revenue generators, i.e. iTunes, AppStore and now iBook club! Look at the AppStore alone, it has estimated between $20 and $45 million dollars in revenue as of May 2009 (as reported by Tech Crunch via Venture Partners numbers). If you don't believe me, watch the main campaign marketing video and you'll quickly hear the mention of all three clubs - showing just how important the message is given they highlighted it on the one video everyone was guaranteed to watch after the keynote!

The reality is that the iPod was the beginning of this global paradigm shift Apple created, iPhone the cherry and perhaps iPad the straightjacket. Think about it folks, with the lack of ports, the lack of operating system function, lack of camera and lack of processing power, the richness of this unit will not come from the hardware as much as it will come from the software experience housed within (or accessible therein).

What did iPad stand to gain from the inclusion of a camera? Nothing! Apple don’t currently have their finger in VOIP or Video Conferencing (as a main revenue generator) so it goes without saying that at the design stage when the topic of the camera came up Steve quickly said, “f%^&* it off boys!” (Or something similar…LOL). I mean which manufacturer, PC or other, would in their rightful mind launch a new device and NOT include a camera, unless their intention was not to create a device but to create a portal. Don’t get me started on the ports (USB or SD), the processor or the lack of pen input! All very achievable at the same price.

This device (and quote me on this) is nothing more than a clever portal, or gateway if you like, to Apple’s three main revenue generators, i.e. iTunes Store, AppStore and iBook. At this stage I should clarify that Apple did not make the world’s best Tablet, nor did they intend to make the Tablet everyone was waiting for; what they did is ensure a profitable business venture for many years to come!

Yes I believe this is a portal to their cash-cows, and yes I believe it was clever on their behalf, and perhaps even timely. What I am uncertain about is when the dust really does settle and users begin to experience this Tablet for reasons other than iTunes, AppStore or iBook will the euphoria remain?

History tells me that most everyone will go for the highest spec’d device which ultimately means spending the most dollars. The end result of all this outlay may offer the largest hurt when you try and work outside of Apple’s intended use. Only time will tell just how engrained Apple’s paradigm has become in our culture, and just how resourceful users are at experiencing outside of the box Apple is creating. Ultimately it may be such a great experience that no one will care and the portal to all or desires is only but an iPad away. With all its Apple sexiness, air-ness and drool appeal we may all be blinded anyway! LOL!

For me however, like GottaBeMobile’s Amy and perhaps Warner, I will stick to the plethora of PC based tablets I have (many Core2Duo, many with dual camera, full Operating Systems, USB ports, SD slots and screens with touch, multi-touch and pen support) and enjoy witnessing iPad’s wave of enthusiasm and new found lovers of Tablet related technologies surge its way around the globe!


Jaded Consumer said...

I disagree that the App Store or iTunes are Apple's main revenue driver.

Yes, the world's largest music retailer has posted a record quarter, but there's no evidence that the billions received came from content and not hardware. Indeed, Apple's accounting method for recognizing iPhone revenue was alone worth billions per quarter.

Although billions of applications have been downloaded for iPhones, most of these have been free and lots of them are $0.99 each, of which 70% goes to developers and the rest largely is eaten in transaction costs. (Processing a Visa or Mastercard transaction can involve both a percentage of the total plus a fixed fee like $0.15 or $0.25, and Apple's bandwidth isn't free.) The benefit of the App Store is that Apple protects its platform by making it more valuable to users.

You may think millions a day, or tens of millions a day, are important -- but Apple is a $50B/year company and the mere millions are not what drives its profits.

Avoiding becoming a commodity box maker like Dell means keeping hardware products differentiated so margins can be maintained.

Apple's decision how to name its tablet and its in-house processor can tell us something about what Apple sees in the products.

Apple is not trying to make money in the existing tablet market; as with the iPod, Apple is trying to create a market on a scale that hasn't previously existed.

-the building doctor- said...

I think the ipad is a complete rethink of the tablet platform. It doesn't pretend to have all the functionality of the MacBook, it has given the whole idea of mobile computing a shake up, stripping down all the functionality that we don't need to have. Sure a camera would have been a great addition but how many cameras do we want to be carrying around with us anyway.

The iPhone apps have shown the world that a phone can be much more (as he taps away on his nes 3Gs). In the same way a plethora of new apps will be appearing over the next few months that will make the ipad more than just a mobile computer.

I have struggled with the processor speeds of tablets and umpc's for years now, trying to run pc programs in a umpc form. The fact is they have never been as powerful as the desktop or laptop and that's where they let you down. Umpc's have been trying too hard for years now.

Let's face it Apple may have just smashed the pc mobile computing market out of the ballpark.

Hugo Ortega said...

@Jaded Consumer: Valid points you add to my argument but by no means have you converted me to your train of thought. Your belief that the percentage of millions gained from software sales has little relevance to their billions of dollars in worth is not one I buy into. The "cost of build" of hardware vs. COB of software is very different. Ultimately the point at which profitability [surpass breakeven point] kicks in is much more significant on software development as it is on hardware development. Don't be blinded by the passion you have for this device, or Apple, and forget that I commend Apple for providing a software and hardware double-edged sword, something no other manufacturer can claim any scale of success like Apple can. The reality is Apple is doing their best to expand on an existing market [“between notebook and desktop”…think: PDA, Tablet, netbook, and many more] with a scale never seen before, but like I said, it’s not by selling Tablets but by boxing users into Apple’s preferred paradigm of thinking, and ultimately their paradigm of revenue. I can see it as an outsider.

@The Building Doctor: “smashed the pc mobile computing market out of the ballpark” is a bit much mate, but everything else you suggested makes sense. What I like about Apple’s involvement is that PC manufacturers, as per phone manufacturers and the iPhone, will be pushed to bigger and better things. There is nothing better than a competitive market as the ultimate winner is the end-user. Suggesting however that compromise and limited feature-sets is a good thing, I think like JadedConsumer, and many others, you’re letting your passion run away with your common sense. The only reason I see merit in your argument is that Apple is doing a great job of creating an ecosystem which potentially can pull this off. Nice work Apple!

@BOTH OF YOU: Thanks for chatting. Love your passion and thoughts!

Rik Carton said...

An insightful post Hugo. I'd say you're definitely back; congratulations!

Hugo Ortega said...

Hey thanks Rik. That means a lot to me. Thank you, sincerely.

raon said...

Couldn't agree more. The tech world is up in arms about multitasking and cameras (me included) but it doesn't matter to apple. They have made a device that will effortlessly whisk us all off, credit details in hand, to music, books, magazines and films. That's where they'll reap the benifits of simple design, Jo Average doesn't ever have to know about ports, standards, interoperbility and stuff I find interesting.

Jo Average would like books and films and music please, Apple are only too happy to oblige.

Nice to have you back, planning any videos?

Hugo Ortega said...

Hey Raon: thanks for the chat! nd I'm glad some of us are not blinding by the hype and see the truth between the lies. I feel so right about this!

Videos. For sure! What do you want to see? Any suggestions? said...

heck, now i have the mental image of a ipad sitting in ts dock on a side table, spinning family photos, and being poked to rent a movie to be played on the tv or something similar.

pepper the house with docks and things get really "interesting"...

Hugo Ortega said... not sure if this is what they are envisaging but it is definitley one great potential usage. Like I say, it will all come down to the ecosystem Aplle creates for the iPad and how much we all buy into it! Thanks for the chat!

Michael Kordahi said...

As always, the man knows what he's talking about. Mostly agree with you mate.

For my money, the iPad is already here, the Eee PC T91MT -

Hugo Ortega said...

Spot on Michael! Spot on!

Tony Hollingsworth said...

Thanks for sharing this Hugo - I put it out on Twitter, got some feedback:

Some previous tweets I received in relation to the iPad:
etc etc

Ha, I just lost minutes diverting into @delic8genius' post on the excellent Eee T91 tablet, via your post Hugo - fantastic! Love one of those.

My opinion now needs reviewing as I did not even think about using iTunes, AppStore and iBook club so much as just using the iPad at home as a cool browser, media player and photo viewer (and perhaps Sonos remote - which I love iPod Touch for - it's better than Sonos' own $700 remote!)

The fact that I can access (some free, some paid) content via Apple's stores would just be a plus for me.

As you say, your interest in Tablet computers is now going to go mainstream, with people learning all about how cool tablet computing is via the iPad marketing. Lets just hope there's room for all the tablets in Apple's wake (like smartphones, I'm sure there is!)


Hugo Ortega said...

@TONY: Cheers Tony, and great set of links. I get the picture! No doubt, whatever the truth/result, people's passions are high on this one. I'll be getting one for testing too and we'll soon see what feedback is once people have them in hand. I still think this is a clever portal, and unlike iPod and other "i" devices, this one may well be the equivalent the "printers and toners" business model, i.e. giveaway the printer so you can make a healthy bottom-line via the toners. (replace printer with iPad, and Toner with iTunes/AppStore/iBook). Please note I didn’t say LOSE on the iPad, no I am suggesting a clever breakeven on the hardware to eat into the market share of all “other” Tablets. It's only my theory and based on the "little" i know about hardware cost-of-build-, bottom-line and R&D...I'm sticking to it! LOL. Thanks Tony.

PS. You know you and I both attended Waverley College?

Peter J Cooper said...

hey hugo welcome back. Good post. For those that don't want to watch the full iPad launch keynote for 90 minutes there is a 3 minutes summary on our blog at too.

Key up the great work. Cheers, Pete.

Hugo Ortega said...

Hey cheers Peter, it's nice to be back. Kinda like riding a bicycle! Great summary on your blog (go there guys!)

Cheers mate!

Mark said...

Nowadays, The Tablet PC is being embraced by medical professionals, salespeople, students and everyday consumers who would like to get a full-featured convenient pc with the extra capability to be used like a pen and a tablet of paper.

Good luck.

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