Moving On...

I've been maintaining two copies of this blog for a while... however in an effort to cut down on redundancy, I've moved my blog over to WordPress.  For new articles and insights into mobile technology, follow me here.

Thanks for reading!
Evan

Seriously?

There has been a lot of buzz about the Notion Ink Adam. It’s basically an Android Tablet with a PixelQi display. The premise is that it will allow the device to have a very long run time with a relatively small battery. While some of the blogs have indicated that this will be an extremely competitive device with the iPad, after watching this video I was left pretty underwhelmed. There is some great technology in the product, but there is no clear differentiation from a software or content ecosystem. Thus those who want to tinker and build some interesting application have a platform on which to do so, but there’s nothing here to recommend to the average user.

If you really want to build solutions in the consumer electronics middle-space between the cell phone and the notebook, then you need to provide more value to the end consumer than a set of raw technologies. The clear differentiators needed are device software, services and a rich content ecosystem. iPad has these, what about your solution?

The iPad Really is Magical!

Steve Jobs proclaimed it, so is it really?  Alan Kays, one of the fathers of modern computing and the visionary behind the Dynabook has indicated that Apple may have it right with this latest device.  Even before the announcement by Apple, people have been asking my opinion of the product and I’ve been a bit guarded on making any prognostication.  After reading the thousands of articles about the device, talking with some people who have hands on experience and others who are building competitive devices, it has become clear that the device is magical, but in an unexpected manner.

While Apple is traditionally viewed as a hardware company and still generates the vast majority of their revenue from hardware sales, services like iTunes have given them a gateway into selling digital merchandise.  The iPad allows for a greater transition into a digital service provider with on-going revenues from a loyal “subscription base” ALL without charging a subscription fee!  Let me deconstruct this.

Apple sells unique hardware devices – iPhone, iPod Touch and the iPad.  Each of these runs the same proprietary operating system which is plugged into a proprietary content, application and media ecosystem.  For these 3 devices, you can only purchase application approved by Apple (who receive a 30% cut) and for any content that you want on the device, Apple has provided a low friction manner in which to acquire content whether it’s movies, audio and now e-books.  And of course Apple also receives a percentage of these transactions as well.  In aggregate the amount of money Apple makes from each of these transactions may be low on a per user per item basis, the cumulative effect is two fold. 

Apple recently sold its 10 billionth song – even if Apple’s profit on this entire transaction is a penny.  That would result in $100 million dollars since iTunes Music Store was launched in 2003.  For a company of Apple’s size, that isn’t a tremendous amount of revenue, but it’s also not insignificant.  Remember that the majority of media purchased from iTunes is only playable on a device or in software made by Apple.

Perhaps the most interesting factor has more to do with the ability of Apple to monetize this new relationship with their consumers.  In any projection of future business, a company assumes some percentage of existing customers will continue to purchase their products (e.g. customer loyalty).  With this number and a projection of product obsolescence, you can determine the replacement rate.  Apple has historically had the highest level of customer loyalty and replacement rates simply because of the way it provides this set of ecosystem value.  With the latest product, Apple is able to not only leverage the past success of their product, but also leverage the unique applications and ecosystem.   Since users continue to purchase via the Apple online “store” for their Apple products, these users are in essence no different than subscribers of the service in the same way that users pay an on-going fee for their cable or cell phones.  Instead of paying a monthly bill, the users are paying up front for the cost of the hardware plus paying for each transaction that takes place.

This small on-going relationship is critical to Apple’s success, particularly since no other hardware or software company has mastered this concept.  Amazon’s Kindle is similar, but doesn’t yet have the same economy of scale and Microsoft’s Zune and upcoming Windows Phone 7 will attempt this strategy, but with a multitude of hardware OEMs the overall success is necessarily diluted by the potential for encouraging users to maintain and engage in the long-term ecosystem.

The iPad is magical simply because it helps to extend the ecosystem and on-going subscriber base to the Apple vision.  Any product that Apple releases that leverages their ecosystem will be magical simply because it helps Apple to generate a long term relationship with their customers.  As to the particular implementation as a “Tablet or Slate” for the consumer, it’s a good approach and may resonate well with consumers, but from a technology standpoint, the device could have been utterly transformative if it had included more natural user interface elements – e.g. Handwriting, Inking and Speech.

Broadcom’s Strategy, and a Big Box Retailer Conquers the World!

At Mobile World Congress, Broadcom showed off their chipsets with a new tablet ecosystem they’re calling PERSONA.  At the core of this strategy is ICE – Information, Communication and Entertainment.  The key concept is that all of these assets are shared across all devices in the consumer’s home.  Thus the tablet is able to talk to the TV, PC, phones, home security system, etc in order to control, monitor, route or view.  Netbook News captured a great video that explains Broadcom’s strategy in more detail.

In this previous post, I described my vision for a consumer tablet and Broadcom is clearly thinking along the same lines.  The only issue for Broadcom is that they are a chip provider and thus create reference designs and not commercially available products – In order for this to take off, they are going to need a major OEM to buy into this vision and integrated it across the line.  This is a task for Samsung or Sony since they have a wide range of products in which they can embed this technology.  Outside of a traditional OEM with the marketing clout and install base to make this a reality, the ability to deliver pervasive technology is difficult.  There is one new dark horse who could get in the role of dictating new technology standards across separate hardware platforms – Wal-Mart.  That’s right, Wal-Mart.

Wal-Mart recently purchased VUDU.  I was an early adopter of the VUDU platform and highly enthusiastic over their original premise of utilizing peer-to-peer technology for delivering high quality movies directly to the home. In my last startup, I advocated and planned for a future mobile media product that would utilize similar technology. While VUDU was not able to create a profitable venture with this product, they were able to create a streaming video service to deliver the same movie catalog directly to internet-enabled TVs.  This capability was the primary purchase intent for Wal-Mart.  Imagine that Wal-Mart could now require all of the TV sets sold at Wal-Mart to be compatible with the VUDU streaming service – e.g. all of their vendors would have to build or license the VUDU technology.  If Wal-Mart takes this step, it becomes an easy leap to imagine a case where they leverage this relationship to require other technology that allows for a particular style of interoperability between consumer devices they sell.  Should Broadcom and others be courting Wal-Mart to provide a new integrated experience for their customers?  And if someone did, would Wal-Mart be receptive?

my ideal tablet

If rumors are true, Apple will be releasing the details of the next great “consumer tablet”.  Speculation has whipped up into a frenzy and has a lot of people wishing and hoping.  Needless to say, I’ll be very surprised and delighted if they actually build something that I’m willing to wait in line to purchase.

If someone does come out with a tablet, here’s my simple wish list:

• Entertain when I have a few minutes between other activities
• Inform of what is going on in the world around me (news, blogs and my social network)
• Be easy to hold, read and interact with, in a wide variety of posture
• Small and light enough to transport with my other things
• Real world battery life of over 8 hours
• Does not incur any reoccurring or additional charges (e.g. no subscription, no fees for content, etc.)
• World class user interface that allows me to simply and elegantly interact with the device

There’s a lot of ways this can be accomplished, but the devil is in the details for actually making something that is usable, useful and needed.  I’ve had some conversations with ODMs who can definitely produce the hardware, but lack the vision for putting together a comprehensive hardware, software and content ecosystem for a total device solution.  Apple is uniquely positioned to do so, but will they?  If not, here's hoping that someone will soon!

CES and Tablets

Last week was the annual trek to Las Vegas where everyone is vying for the spotlight with their latest gadgets and technologies.  As I reflect on what I’ve seen at the show, it was clear that on the show floor, there really weren’t any break out products or new technology that was dramatically different.  It’s true that Intel and LG did have a tiny PC-phone running a Moorestown processor, but honestly that’s something that isn’t ready for primetime nor is it really all that interesting, yet.

Plastic Logic did have their e-reader QUE on display and while the technology behind the display and physical device is impressive, the end application wasn't all that impressive.  The basic concept has been around for at least 10 years -- A Xerox company, Uppercase, created a very similar device “eCase”.  All of a user’s documents were printed to this portable device where they could be marked up with a pen and synched back to the PC.  For eCase, the target market was executives who were not big on email and thus would have all of their email and other documents printed to this portable device where they could ink their reply and their secretaries would then respond appropriately.  This was primarily born out of the costs of such a device at the time (> $1500) and from an understanding of Xerox’s executive culture.  So what has changed since then?  The overall weight of the device is significantly less, greater connectivity options (3G), longer battery life, new screen technologies, a bunch of 3rd party content providers and a wider breadth of marketing for the device (e.g. business users rather than executives).  The device is still going to be rather pricey and black & white only.  All of that said, I think that there is a huge potential upside for devices like the QUE, but the value proposition to the user still requires a lot of work.  Other than a bunch of early adopters, I don’t know too many people who are going to pay $649 and up for this particular device.

The buzz about the show, more from the online community and private showings was about Tablets or Slates as they now seem to be called.  Slate, eWeek and JK on the Run had great articles about the overall situation.  Many of them appeared to be rushed for CES as a hedge against whatever Apple might be cooking up, from the $117, 5” tablets from Chinese companies that few have ever heard of before to the behind the doors presentations from Dell, none of the devices were all that compelling.  That is to say, from my perspective as a founder of the Tablet PC at Microsoft, what I saw was stock solutions with narrowly focused UIs that don’t take into account the purpose, functionality or potentially unique aspects of what a Slate can become.  What manufacturers and OEMs are missing is a rich targeted experience.  If you want to make a great slate, customize it around a particular set of content and functionality!  And then do your homework and make sure that the solution you’re providing really is something that is needed, useful and usable.

Courier tablet to be revealed at CES?

The New York Times is indicating that Microsoft and HP are going to be presenting a new consumer tablet at CES.  This could be the rumored Courier tablet or it could be some other slate type device that is more geared for consumers.  HP has been experimenting with touch screen based computers for the last couple of years in addition to being one of the earlier OEMs releasing a Tablet PC.  However the rumors are now going that this multi-screen Tablet is going to be launched in order to take some of the pizzazz away from Apple and their tablet.  Only have to wait until tomorrow to find out - and if the rumors are true, I'll definitely be trying to get a look while I'm at CES.

Update:  Seems that many sources say that the New York Times didn't get its facts straight and thus, Microsoft won't be announcing a tablet, only 7 hours now to SteveB's keynote.

Update 2:  Nothing to see here.  SteveB just showed off a new Tablet from HP, that has a touch input display and not the fabled or rumored Courier device, just good old Windows 7 with HP's Touch interface shell.