ZDNet Must Read:
SAP: New leadership, same old story?
SAP CEO Leo Apotheker has resigned and two of his former lieutenants---Bill McDermott, head of sales and Jim Hagemann Snabe, head of product development---have become co-CEOs. Are these two executives... Continued »
Category: Apple
February 9th, 2010
RIM's BlackBerry, Apple iPhone rule smartphone roost
Research in Motion’s BlackBerry platform has a comfortable lead in U.S. smartphone market share with Apple’s iPhone a solid No. 2, according to comScore data. Microsoft’s Windows Mobile comes in third place.
The comScore data is notable as a contrast to the buzz-o-meter. For instance, RIM, which is sometimes portrayed as a has-been set to get pummeled by the iPhone, holds 41.6 percent of the smartphone market in the U.S. based on platform. Apple has 25.3 percent.
February 5th, 2010
Amazon losing the e-book pricing battle: Will content trump distribution?
Amazon continues to joust with book publishers over the price of e-books. The skirmish started a week ago with a showdown with Macmillan, spread to Harper Collins and now includes Hachette. These battles boil down to one question: Does content trump distribution or vice versa?
First, the background.
As noted earlier in the week, the Macmillan battle—Amazon pulled Macmillan books from the Kindle store and then capitulated on pricing—just invited other publishers to play hard ball. The battle boils down like this:
- Amazon was pricing e-books at $9.99 under a wholesale model;
- Publishers wanted an “agency” model where they dictate prices and give the distributor a cut;
- Publishers want new digital releases priced at $12.99 to $14.99 and Apple obliged with its iPad and book store;
- Now Amazon has a real problem and has to cave.
Simply put, Apple set off a lot of disruption in Amazon’s model. Macmillan has ads bashing Amazon, which is kind of silly when Macmillan CEO John Sargent then pens a letter with passages like this:
Over the last few years we have been deeply concerned about the pricing of electronic books. That pricing, combined with the traditional business model we were using, was creating a market that we believe was fundamentally unbalanced. In the last three weeks, from a standing start we have moved to a new business model. We will make less money on the sale of e books, but we will have a stable and rational market…
A word about Amazon. This has been a very difficult time. Many of you are wondering what has taken so long for Amazon and Macmillan to reach a conclusion. I want to assure you that Amazon has been working very, very hard and always in good faith to find a way forward with us. Though we do not always agree, I remain full of admiration and respect for them. Both of us look forward to being back in business as usual.
News Corp. CEO Rupert Murdoch, who owns Harper Collins, piled on earlier this week on the company’s earnings conference call:
Harper Collins is one of the world’s leading publishing houses with much improved profitability. There is no doubt we have been at the forefront of the global debate about the value of content. At times that debate has been intense but that was essential when the stakes were so high. Far too many content companies were passive in the face of predatory behavior and self-serving [sophistry]. Passivity and meekness are not characteristics of our company. A year ago our criticism was thought heretical. But somehow the profane has become profound and the content clan has gathered around our ideas.
As I said earlier, the value of content is now clear. Instead of the existential debate about value now we are merely haggling over valuations. Consumers want content to be delivered immediately and on a ray of devices that suit their needs and they are willing to pay to be entertained and informed.
Without content the ever larger and flatter screens, the tablets, e-readers and the increasingly sophisticated mobile phones would be lifeless. Without content these ingenious and wonderful devices would be unloved and unsold.
And then there’s the email from Hachette Book Group USA CEO David Young via Media Bistro:
There are many advantages to the agency model, for our authors, retailers, consumers, and publishers. It allows Hachette to make pricing decisions that are rational and reflect the value of our authors’ works.
Add it up and publishing houses want a “rational market” according to them. This rational market is the same one that music companies wanted—and lost to Apple’s pricing model. Content companies learned from that and don’t want Amazon to make $9.99 the e-book template.
What side of the equation should dictate pricing: Content or distribution? The tug-of-war over this question flares up repeatedly. Content companies slug it out with cable distributors over fees. NBC Universal pulled its content from Apple’s iTunes for a bit—only to return and cook up Hulu. Google is duking it out with the Associated Press. Now we get the Amazon skirmish.
Simply put, content and distribution need each other. However, distribution has won the day throughout the Internet age. After all, you buy Google and Amazon shares and not newspaper stocks like Gannett and the New York Times. We’ve been told for years—by media titans—that content is king, but I’ve seen little evidence that backs the statement up.
This distribution vs. content discussion came up on the Enterprise Irregular email list. The consensus seemed to be that distribution still wins and book publishers are reacting to a shift in power away from them—just like the music industry and Hollywood. Others noted that book publishers would be better off adopting innovative models such as Tim O’Reilly’s.
Is it different this time? Probably not, Amazon’s distribution power may have taken a hit, but it’s just a matter of time before digital content starts dictating time to market and book publishers have to speed up their publishing models. Vinnie Mirchandani, who is publishing a book, is stunned by how long it takes to bring a completed product to market. The book supply chain is a mess. Content companies can fight all they want to preserve their current models—and maybe even notch a few victories—but their ways of doing business will be disrupted by new distribution vehicles in the end.
February 3rd, 2010
Amazon acquires touch screen startup; Souped up Kindle being planned?
Amazon is reportedly buying Touchco, a start-up focused on touch screen technology, in a move that may signal a multi-touch Kindle in the future.
According to the New York Times, Amazon is acquiring Touchco, a New York-based company with 
a handful of employees and technology that was never commercialized.
Touchco was a project at New York University’s Media Research Lab. Terms of the deal weren’t available, but it doesn’t appear to be material enough to warrant much disclosure.
What does this deal mean?
For starters, the Kindle is likely to use this technology for a touch screen at some point. Amazon appears to be buying technology that could put the Kindle on similar footing with Apple’s iPad.
Touchco also has color screen technology with touch capabilities throughout. Amazon’s move is likely to be just the beginning. Expect a Kindle price cut shortly and then new models later this year.
Simply put, there’s a netbook/e-reader arms race underway. This should be fun.
February 3rd, 2010
Is Android buzz starting to tarnish the iPhone's luster?
I pinched and zoomed the Google Maps images on my Nexus One smartphone this morning, the same pinch-and-zoom feature that iPhone (and iPod Touch) owners have been using for some time.
The pinch-and-zoom experience on the Nexus One, which was unlocked with an OS update released yesterday, was nice. It wasn’t one of those write-home-to-mom, earth-shattering experiences - but it was nice.
To be honest, Google didn’t really need to enable multi-touch, as the technology is known, to sell me on the Android experience. I was already impressed with Google Maps - as well as several features - on Android devices and already considered them to be superior to the iPhone experience.
Actually, as long as I’m being honest, my fanboy love for Apple products has actually been slipping in recent months. Sure, I still love my Macbook - but I’m intrigued by what Google might be able to pull off with its Chrome OS, which is in the works still. (Did you catch the recent buzz about a Google Tablet?) I absolutely like my iPod Touch for playing games, watching videos and listening to music - but I no longer feel like something in my life is missing without an iPhone.
February 2nd, 2010
Google to Apple: I see your mobile update and raise you one
Today seems to be the day for mobile device updates - and I’m ready for mine.
Apple issued the first update to the iPhone OS, which includes iPod Touch devices, to fix some app crash problems and enhance the battery life, as well as install some security updates.
Nothing major there. It’s nice to have apps that don’t crash upon launch and a better performing battery is always nice, too - but those didn’t really change the user experience.
Then comes Google’s update to Nexus One devices later in the day. It’s a nice one, notably the inclusion of multi-touch, the pinch-and-zoom that iPhone users have come to love. That enhances the experience and brings more value to the Android device. Some might even argue that it levels the playing field between Android and iPhone.
My iPod Touch is updated to latest version of the OS, something that occurred when I plugged the device into my Mac for a sync session. Google’s over-the-air update hasn’t hit my device yet. I’m still getting a message that tells me my system is up to date. Once I make the update, I’ll post some thoughts on the new experience.
February 2nd, 2010
Apple's iPad: A hit with business users?
The history of tablet PCs is littered with products that didn’t deliver, lackluster sales and poor software and hardware integration. It’s not surprising that consumers never went gaga for the tablet PC. Business has been a different story.
Simply put, you can find tablets in industries such as healthcare. And there are business applications for tablet PCs. Vertical industries may be the only place where you’ll find more than a dozen tablet PCs in the wild.
Now Apple’s iPad enters the picture. The iPad’s snazzy design and selection of apps could make it a hit with the enterprise. Will the so-called “consumerization of IT” carry the iPad to a business near you? Like the iPhone, it’s quite possible that workers will bring the iPad to work. The business case is a bit unclear at the moment, but TechRepublic has been putting a lot of thought to the iPad and business implications.
Also: 
Lessons to learn from tablets past (photos)
Here’s a look at a few ideas from TechRepublic’s Erik Eckel and Jason Hiner, the business arguments for the iPad and my take.
Eckel at the 10 Things blog makes the argument for the business user based on the iPad’s features.
Email, Internet access, ease of use, integrated keyboard, apps, iWork and calendaring and contacts make the iPad a no-brainer for traveling business users.
Of Eckel’s points, the biggest one may be the apps. He writes:
The true value of any computing platform is largely dependent upon the number of third-party applications written for it. Programs written for the iPhone will run on the iPad, and upon the release of the iPad SDK, iPad-specific applications will absolutely flood the market. If the iPhone is any barometer, just keeping track of available tools, utilities, and programs will prove mind-boggling. Already some 140,000 applications have been produced for the iPhone and downloaded some three billion times. Expect the same fervent energy to surround the creation and consumption of iPad applications.
What’s the business use here? In a word: Dashboards. Salesforce.com, Oracle and others all have iPhone apps showing sales, dashboards and corporate data. However, the screen is kind of small. With the iPad, you can check out a full dashboard of data, track sales and get your corporate health check on the go. Simply put, screen size matters for corporate dashboards. You can envision multiple business intelligence applications on deck.
Hiner goes with the following business use cases:
- Replace 200-page business documents
- Business reading and audiobooks for road warriors
- “Back of the Napkin” sketches
- Small-scale presentations
- Conference room computing
Among those points I’ll take door numbers 1 and 4. The paperless office has never happened, but if the iPad can search and scan 200-page documents you can see applications in the legal sector. Perhaps lawyers will carry iPads to the court room—of course most trials I’ve been to ban wireless access. And I know of a few Apple sales folks that are pitching legal firms to replace BlackBerries with the iPhone. When I heard this, I was surprised that Apple was devoting time to corporate sales. The iPad is a natural extension for law firms.
As for door no. 4, the iPad is a no-brainer presentation device. You prop it up and the iPad can be your presentation machine. Sure, the folks in the meeting will probably be drooling over the iPad, but at least it’ll look like they are paying attention.
Taking that presentation argument further, the iPad would be a good fit in retail environments. Customer service, inventory checks and mobile kiosks are all potential uses.
Add it up and there are a bevy of vertical industries where the iPad would apply. Watch the health care, retail and legal verticals closely.
February 1st, 2010
WSJ: Google preparing online apps store of its own
Google is so committed to selling its suite of cloud-based apps to businesses that it’s taking a page from the playbooks of companies like Apple and Salesforce to do so. According to a Wall Street Journal report, Google is getting ready to launch an online store for business software that integrates with its Web services.
Like Apple’s App store and Salesforce’s App Exchange, the Google store would feature apps built by outside developers to integrate with Google’s services. Eventually, the company would allow customers to but these apps through the online store. The WSJ report said the company is expected to announce its new store as soon as March.
The company didn’t confirm a store to the WSJ - but it does make sense. Like salesforce and others, Google also hosts a conference for developers, called I/O. During last year’s conference in May, the company offered a rare preview of Google Wave, an online collaboration tool that admittedly wasn’t ready but needed the help from third-party developers to enhance it. Eventually, Wave will integrate with other Google services for seamless interactions between the different apps. For now, Wave remains in its early stages.
Google has made progress with the advancement of Apps for businesses, signing companies such as Motorola, as well as municipalities, such as the cities of Los Angeles and Orlando. But the company continues to play catch-up with Microsoft, which still dominates with its Exchange and Microsoft Office software. Among the biggest criticisms of Google’s Apps is the clunkiness of some of the software tools, which Google has been addressing with updates, largely unannounced and usually just added as they’re made available. In addition, concerns over reliability of the cloud and security of the data have taken center-stage in many of the debates.
Still, business applications are migrating toward the cloud and Microsoft has launched its own cloud-based suite, as well, to counter Google’s moves. To highlight the growing pains, though, Microsoft experienced its own outages, prompting a credit to customers to compensate for it.
The cloud still presents some concerns - but the companies behind will continue to invest in it, confident that the cloud computing will still have a place in the future of business.
February 1st, 2010
Amazon vs. Macmillan: Capitulation will lead to higher e-book prices, Apple iPad momentum
A showdown between Amazon and book publisher Macmillan over the weekend will translate into higher prices for digital books. Simply put, Amazon caved. And once other publishers follow Macmillan’s playbook e-book price inflation will be rampant.
The talk of the weekend was Amazon’s move to pull Macmillan’s digital books from the Kindle. In a nutshell, Amazon wanted to price Macmillan’s digital books at the customary $9.99, a price that’s nice for the consumers, but has publishers freaked out. Macmillan wants to charge you higher prices for new digital releases. Amazon took a stand over the weekend—when sales wouldn’t be impacted too much—and then gave in before Monday rolled around.
On Friday, Amazon removed Macmillan’s best sellers—think the “Gathering Storm,” from its store. You could only buy print editions through third parties. Kindle versions were nuked too.
It looked like Amazon was taking a stand. On Sunday, it was clear Macmillan won the same terms it cut with Apple last week for e-books. In a nutshell, Apple allowed publishers to set the price of their own books and the retailer would act as an agency. In this model, the retailer gets 30 percent commission and prices for new releases will be in the neighborhood of $12.99 to $14.99. Amazon typically is a wholesaler. Now Amazon will be forced to play by the model set by Steve Jobs.
Special Report: Apple tablet: It’s an iPad
Apple played along with five large publishers—Hachette Book Group, HarperCollins Publishers, Macmillan, Penguin Group and Simon & Schuster—for its iPad. The iPad has proven so disruptive that it isn’t even in the market and Amazon is backpedaling on its pricing policy. In less than a week, Apple has hurt Amazon’s e-book pricing power. Now when Apple’s book store launches it will be tougher for Amazon to use price and scale as a weapon.
According to the New York Times, Macmillan gave Amazon a choice. Take a “release window,” or a delay of months before a digital book was available after a hardcover release, and stick with $9.99 pricing. Or price new digital books higher.
In a forum post, Amazon said:
Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.
We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling e-book. We don’t believe that all of the major publishers will take the same route as Macmillan.
A few things to note here:
- First, Amazon could have gone nuclear on Macmillan for a week or two if it really wanted to prove a point. A weekend skirmish wasn’t enough to prove much of anything. If Amazon really wanted to hurt Macmillan it would let it suffer a month’s worth of lost sales.
- Amazon is urging customers (in a passive aggressive way) to let their wallets do the talking.
- Amazon seems to think other publishers—like the five of six largest ones that have Macmillan’s deal on the iPad—won’t follow suit.
On that last point, Amazon is delusional. All publishers will go the same route as Macmillan. E-book prices will rise. And Amazon loses its e-book pricing leverage. Apple iPad 1, Amazon Kindle 0.
As for customers voting with their dollars, the e-book market isn’t large enough to move the needle. I stopped my Kindle subscription of the Wall Street Journal when prices soared, but I doubt anyone noticed.
Meanwhile, some Amazon customers are already caving too. Some reaction to ponder from Amazon customers:
I believe $14.99 is reasonable. It’s a heckuva lot less than what I paid for new hardcovers. (And I get to read them on Kindle!) People who waited for paperbacks can wait for the cheaper eBook edition. You offer them for sale and we’ll decide whether or not to buy them.
And.
I personally have no problem paying more for a new-release e-book. However, I would then expect that it be available on the same day as the DTB hardcopy. If they want to delay for a month or two then no, I would not be happy to pay the premium price.
And then there are the folks that say Amazon just punted its pricing power away:
I sure hope you are right on that call… I believe that you just showed a weakness and the others will pounce knowing you gave into Macmillan…
And.
I still love my Kindle and still love my books. I just wish you would have stuck firm to not letting Macmillan dictate your prices as part of this settlement. Sounds like a victory for the iPad and Apple…
Indeed, many customers saw Amazon’s move as a recipe for disaster.
I have no issue with you over price. I will be disappointed, however, if Amazon’s cedes the right to set that price to Macmillan and agrees to an “agency” relationship, where they are not in charge of their own purchased inventory.
And.
Amazon - I will be sorry if you give in on this. Stating publicly now that will do so, I think, is also a mistake. I believe publishers will believe they can always have you over a barrel, when probably the reverse in true.
Steve Jobs is calling the shots here and costing the consumer more money.
Simply put, Amazon is playing a game it could very well lose to publishers and Apple.
Related: Apple’s iPad vs. Amazon’s Kindle: It’s not zero sum
January 29th, 2010
Apple's iPad vs. Amazon's Kindle: It's not zero sum
Amazon provided its most detailed figures on sales of its Kindle put the units in the marketplace in the millions. The big questions: How long can Amazon can defend its turf vs. Apple’s iPad? And will consumers consider the iPad and Kindle to be two completely different devices with different uses?
The e-commerce giant on Thursday reported another strong quarter, but the highlight of the financials and the call may have been at least some details on Kindle sales. Due to an accounting change where Amazon can recognize more Kindle revenue up front, the company had to offer a little more detail than usual about sales. Granted, Amazon didn’t offer much, but CEO Jeff Bezos said in a statement:
Millions of people now own Kindles. And Kindle owners read, a lot. When we have both editions, we sell 6 Kindle books for every 10 physical books. This is year-to-date and includes only paid books — free Kindle books would make the number even higher. It’s been an exciting 27 months.
Special Report: Apple tablet: It’s an iPad
On a conference call, Amazon CFO Tom Szkutak said:
We think we are focused on the customer, and I think when you look at Kindle, that’s a — certainly a good example of that. We think we built a nice — very nice purpose book — purpose device, and that’s — excuse me, that’s purpose built for reading. And we believe that readers deserve to have a dedicated device with great selection at great prices.
And then there’s Amazon’s annual report that notes $508 million of deferred revenue will be recognized over 2010 and 2011. If you assume, most of that deferred revenue is related to the Kindle—something analysts were trying to figure out on the conference call—you come up with some kind of guesstimate. In any case, the Kindle is nothing in the grand scheme of $24.5 billion in annual revenue Amazon brings in.
Susquehanna Financial Group analyst Marianne Wolk reckons that Amazon has sold 2.3 million Kindles so far and will ship another 4 million in 2010. Analysts expect Apple to ship anywhere from 1 million to 5 million iPads in calendar 2010.
And if you look at AT&T’s most recent quarter, the company snared many wireless subscribers via emerging devices like e-readers. You could bet that many of those subscribers were due to AT&T’s contract with Amazon on the Kindle.
Wolk writes:
The Amazon’s Kindle eReader is targeted at Amazon’ most active book customers, the avid readers that buy 30+ books per year. The device is optimized for reading and clearly lacks some of the bells and whistles of the multi-purpose category. Thus, the Kindle (2 or DX) is a great reading device featuring eInk, long two-week battery life, and free wireless to buy a new book instantaneously. We believe Amazon will be effective at retaining these customers with the Kindle, a wide selection of eBooks and its recommendation engine – which leverages a 10+ year history of book purchases and personalized information about its best book customers.
Toss in Amazon’s customer service, store, better prices and a few wild-cards like apps for the Kindles and the company should hold its own against the iPad. Yes, Apple’s iBooks store is a competitor in the long run to Amazon, but I’d put my money on the e-commerce expert in that battle.
Apples and Amazons?
January 28th, 2010
McGraw-Hill should blame itself, not media, for its iPad "confirmation"
The day before Steve Jobs walked onto a San Francisco stage to surprise everyone with something that really wasn’t much of a surprise, the CEO of McGraw-Hill appeared on CNBC to talk about the company’s earnings. At the tail end of the interview, he was asked about the rumored Apple Tablet, to which he replied:
Yeah, Very exciting. Yes, they’ll make their announcement tomorrow on this one. We have worked with Apple for quite a while. And the Tablet is going to be based on the iPhone operating system and so it will be transferable. So what you are going to be able to do now — we have a consortium of e-books. And we have 95% of all our materials that are in e-book format on that one. So now with the tablet you’re going to open up the higher education market, the professional market. The tablet is going to be just really terrific.
Today, McGraw-Hill is saying that it did not confirm the what we now know to be the iPad - and was not dropped from Apple’s presentation at the last minute as a result of it, as some has suggested this morning. Here’s what a spokesman said, as posted on All Things D’s Digital Daily blog:
As a company deeply involved in the digitization of education and business information, we were as interested as anyone in the launch of the new device, although we were never part of the launch event and never in a position to confirm details about the device ahead of time… [McGraw’s} speculative comments about Apple’s pending launch, which he shared earlier in the day in a call with investors, were simply intended to suggest that if the new device were to use iPhone applications, many of our education products would be compatible with the technology and could be made easily available on it. Unfortunately, it seems that many mistakenly interpreted his comments as being more specific to yesterday’s announcement…
OK. Maybe McGraw wasn’t booted from the Apple’s big screen presentation as an a publishing partner. I’ll buy that. But to the argument that McGraw’s CEO didn’t confirm the iPad and that we media types “mistakenly interpreted” his comments, I say Hogwash! (Actually, I’d probably say something else, but…)
Here’s why:
January 28th, 2010
Why Apple won't be able to sell an iPad to this Mactard
Regular readers know that I’m a pretty big fan of Apple products. At my house, there are Macbooks and iPods, a Time Capsule and even AppleTV. No, I don’t have an iPhone - but that’s because I’m no fan of AT&T’s service.
And, you won’t be finding an iPad at my pad when it hits the stores, either.
Don’t get me wrong. I like Apple’s products. I like how Apple’s user interfaces reflect an understanding of what the consumer really wants. I think the customer service in the stores is top-notch. And I appreciate the innovation that the company brings to the table when it introduces new products.
But I have say that this iPad - a $500 iPod Touch on a bigger screen - just isn’t doing it for me. It’s not because I don’t like it - I actually think it’s a very nice device. No, I just don’t see it creating enough value for me to buy.
Hold on. Before you go reading too much into that, let me elaborate.
I don’t mean to imply that the device isn’t worth the starting price of $499. In fact, that’s the thing I kept coming back to as I tried to convince myself that this was something that I’d be willing to buy. If the price has been $999, then the decision would have been easy. That price point makes it harder to say no.
But $500 is $500 and I just didn’t see the iPad doing anything beyond what I can already do with my Macbook or iPod Touch. Maybe if there was some sort of killer app for the iPad, something the truly made this device something more than an oversized iPhone. But there really wasn’t. Not even the e-reader thing was enough to take it to the next level - for me. It just never seemed to set itself apart in a way that allowed it to scream, “I represent an entirely new category.”
Normally, I’m the first one to jump on the Apple bandwagon but, not this time. I was ready to jump on board with what I initially predicted what I thought the iPad might be - a family entertainment device, something that could be shared among the members of the family to become the household jukebox, movie player, magazine rack or photo album. Yes, I realize that’s essentially what it is - and I could have been wowed enough to think of it as a new living room product - but then Jobs started checking e-mail and Marketing VP Phil Schiller started working on spreadsheets and presentations and I was suddenly reminded that this wasn’t some sort of cool device focused on multimedia entertainment. This was still a computer, a mobile computer.
And that’s when I realized I already owned a couple of those, the productivity laptop I’m typing on and the handheld iPod Touch that was waiting in my backpack for the walk back to the office.
As strange as it sounds, I’m not ready to give up the two products in place of one new one. Those two products are used in different scenarios to do different things under different circumstances. Yes, I can listen to music or watch a video on my laptop, just as I can also check e-mail or my calendar from my iPod Touch, or an iPhone. But in the way I use them, one seems better for some tasks than the other.
Yes, I realize that $499 is a breakthrough price and that people will line up to get one at this bargain price point. But, I honestly can’t justify to myself - or my family budget - spending that kind of money on something that doesn’t really bring anything special to the table
I sure do hope this doesn’t mean my membership to the Apple fanboy club will be revoked.
Complete ZDNet coverage: Apple Tablet: It’s an iPad
January 28th, 2010
Apple iPad: One heat seeking missile aimed at netbooks, e-readers
Apple has unveiled its iPad tablet and almost instantly the debate began: Is this device a computer or a mobile device? Is it an e-reader or light laptop? Where does the iPad fit? Is this tablet really different? Apple likes those questions since the iPad is one device aimed at two markets—e-readers and netbooks.
Simply put, boxing the iPad into a strict definition just doesn’t work. In some respects, netbooks and e-readers are designed for the same tasks: Reading, Web content and light use. Apple CEO Steve Jobs appears to be targeting both with the iPad.
Consider Jobs’ unveiling on Wednesday (Techmeme):
Jobs said the iPad is “more intimate than a laptop and more capable than a smartphone.”
Sounds like a netbook rival. But then Jobs uncorks the Amazon Kindle jabs.
“Amazon has done a great job with the Kindle and we’re going to stand
on their shoulders and go a little further.”
Jobs really revealed that the iPad is a netbook and e-reader heat seeking missile when he outlined the device’s pricing. “We had very ambitious technical goals and user interface goals, but also aggressive price goals because we wanted to put this in the hands of lots of people. The iPad pricing starts at $499,” he said. In fact, the pricing probably saved the whole event. Every skeptic I know—including the one I see in the mirror—was on board for $499. Why? That price is well known and it’s an amount where you say, “I could do that.”
Andrew Nusca: Why Apple will sell millions of iPads in 2010 Special Report: Meet the iPad: $499 and up Apple iPad: First thoughts on how it will impact business users
To wit:
The Kindle DX goes for $489. It’s no coincidence that a Google search on “Kindle DX” yields sponsored ads for Apple’s iPad.
Reading that it’s clear that Apple is aimed at the Kindle. Piper Jaffray analyst Gene Munster writes:
We believe the iPad and Kindle can comfortably coexist for the next year given their different functionality and price points. We’ve taken a look at the iPad and believe Amazon’s Kindle is superior as a dedicated reading device because of its eInk technology, whereas Apple’s iPad is better suited as a multimedia device. That being said, we believe the devices will compete more directly in 2011 as their functionality evolves and prices come down.
However, if you follow the money—actually keyword advertising—it’s clear that the iPad is also positioned as a netbook killer.
Do a search on netbooks and you get an iPad sponsored ad.
Apple’s Tim Cook called netbooks junky so the company will chafe at the term used in the same sentence as the iPad, but the keywords say something different.
Meanwhile, the iPad is a souped-up e-reader (although I would like to try it on the deck or on the beach for it to truly upend the Kindle). In geek circles, the iPad can spark some debate about its positioning. CNet’s Dan Ackerman captures the scuttlebutt. Is the iPad a computer or a mobile device? The debate could last longer than you’d think. Munster writes:
After using the iPad, we believe it will cannibalize iPod touch sales, but not Mac sales. The gadget is a premium mobile device, not a computer; as such, we see some iPod touch buyers stepping up to the iPad, but consumers looking for an affordable portable computer will likely stick with the MacBook lineup.
These debates happen when a company is trying to redefine a category. Apple’s iPod touch is more gaming machine than music player. Toss in the apps and you can make the argument that the iPod touch is a mini-PC. The waters get really murky with the iPad.
The iPad doesn’t fit well into any category. What’s unclear is whether Apple dangled enough carrots in front of buyers to keep them interested. Once the initial reaction wears off consumers start crunching the numbers. ZDNet’s Joel Evans walks through his buying calculus. I have my own, but would probably lean in favor of an iPad. Overall, technology buyers have to ask whether they want to carry yet another device. If so, the iPad warrants a look.
January 28th, 2010
Do all signs point to a bounce in PC demand in 2010? [podcast]
We’re in the middle of earnings season for public companies. See what we’ve learned from tech companies about PC sales bouncing back in 2010.
The Big Question is a joint production from ZDNet and TechRepublic that I co-host with Larry Dignan.
You can play this 19-minute episode from the Flash-based player at the top of the page or:
If you enjoy this podcast, please go to to our iTunes page to rate it and leave a short review.
Stories discussed in this episode:
January 27th, 2010
Apple iPad: First thoughts on how it will impact business users
Lots of people are talking about Apple’s new iPad device, but TechRepublic and ZDNet analyze it from the perspective of its impact on business users.
The Big Question is a joint production from ZDNet and TechRepublic that I co-host with Larry Dignan. This is a special episode, covering the Apple iPad announcement. Larry was busy writing his analysis of the iPad so I had two special guests: ZDNet editor Andrew Nusca and TechRepublic editor Bill Detwiler.
You can play this 23-minute episode from the Flash-based player at the top of the page or:
If you enjoy this podcast, please go to to our iTunes page to rate it and leave a short review.
Stories discussed in this episode:
- Meet the iPad: Apple goes aggressive; $499 lowest price point (ZDNet)
- Apple introduces the iPad (TechRepublic)
- Apple tablet: It’s an iPad (ZDNet)
- The Tale of Steve Jobs and the Five Dragons (TechRepublic)
- Apple’s iPad: A year to gain steam and breakout in 2011? (ZDNet)
January 27th, 2010
Apple's iPad: A year to gain steam and breakout in 2011?
Analysts say that they expect a measured adoption curve for Apple’s iPad with sales momentum accelerating in 2011.
Apple on Wednesday unveiled the iPad, a 10″ tablet aimed at both the netbook and e-reader markets. The pricing of the iPad—starting at $499—was lower than many folks expected. That lower pricing, which was designed to get the device into as many hands as possible, is likely to mean higher shipments in 2010 and more adoption in 2011.
Special Report: Meet the iPad: $499 and up
In a research note, Piper Jaffray analyst Gene Munster said:
The pricing is lower than we were expecting. We are raising our estimates for the first calendar year of sales from 2m to 3m-4m vs. an anticipated Street consensus number of 4m-5m. We have measured enthusiasm for the device’s first year (2010), but we expect 2011 to be a breakout year for the iPad adding $4.6b (7.5%) to revenue in CY11.
In other words, Munster is expecting some skepticism about the iPad despite today’s initial enthusiasm. Munster said the device is targeting the “casual computing market” between the iPhone and MacBook. In reality, the iPad is likely to ding sales of the iPod touch.
After using the iPad, we believe it will cannibalize iPod touch sales, but not Mac sales. The gadget is a premium mobile device, not a computer; as such, we see some iPod touch buyers stepping up to the iPad, but consumers looking for an affordable portable computer will likely stick with the MacBook lineup.
In other words, Munster expects a lot of consumers to ask why they need a tweener device.
Phil Cusick, an analyst at Macquarie Research, considers the iPad to be an incremental device for many users. He’s projecting 5 million iPad units in 2010.
January 27th, 2010
Video: 60 seconds with the iPad
After Steve Jobs left the stage at the Apple iPad event this morning, attendees were invited to step into another room for a chance to actually touch the iPad. The lines were long to get in and the crowds around the handful of iPads available were pretty heavy.
Still, I managed to get a few minutes of play time with the iPad. I’ve already said that it appears to be an big-screen iPod Touch/iPhone - and after a minute or so with it, I still feel the same way.
But what I really wanted to see for myself was how truly thin it was and how heavy it felt. Steve Jobs said it weighs 1.5 pounds, which makes you think it will be light as a feather.
It’s not. It’s got some weight to it - but I still haven’t decided whether that’s a good thing or a bad thing. With that said, there isn’t much chatter in this video. With it, I simply wanted to showcase how thin the iPad is and what the screen looks like. So, here’s my 60 Seconds with the iPad:
January 27th, 2010
Apple takes on Amazon with iPad e-reader features, bookstore
At an Apple press event, CEO Steve Jobs shows off the company’s new iBooks app. Users can now browse, read reviews, read a sample excerpt, or just buy books–and the book downloads to a virtual “book shelf.” The software has the support of five of the largest publishers, including Simon and Schuster.
January 27th, 2010
iPad's bottom line: specs and price
Apple CEO Steve Jobs sums up all the features and pricing of the new Apple tablet.
Special Report: Apple tablet: It’s an iPad
January 27th, 2010
Meet the iPad: Apple goes aggressive; $499 lowest price point
Today is the big day: Apple is scheduled to announce its “latest creation” at a San Francisco event at 10 a.m. Pacific Time. I’m here at the Yerba Buena Center for the Arts, seated among a large turnout of press. People are still looking for seats and classic rock tracks are being played.
On the stage, in front of a large screen with an Apple logo on it, sits a single leather chair and a small round end table. Made to almost look like a space where someone might sit to read the paper, a magazine or a book, I can’t help but wonder if my coffee table tablet theory might just be right.
The play-by-play:
11:35 a.m.: My verdict. The price point makes it interesting but I’m still not convinced that this device is bringing anything really new to the game. The apps are a bit enhanced but beyond that, it does pretty much everything I can already do with my Macbook and iPod Touch. The hype was bigger than the event or product.
11:33 a.m. There was no “One More Thing” from Steve. He thanked us for coming, the lights went up and the classic rock music is back.
11:32 a.m.: The iPad is the “most advanced technology in a magical and revolutionary device at an unbelievable price,” Jobs says.
11:30 am: Jobs is back. He says he thinks that they have found a way to bridge iPhone and the laptop. Because the company has already shipped 75 million iPhones and iPod Touch devices, there’s no real learning curve for new users who are already familiar with it.
11:28 a.m.: As I watch this video that’s a full recap of the iPad, I find myself kind of iBored - but I haven’t given up all hope yet. I’m hoping that Jobs comes back with a “One More Thing” to save this event from bombing.
11:22 a.m.: A video talking about what a breakthrough product the iPad is and how it “just feels right” to hold the Internet in your hand as you surf it.
11:20 a.m.: Here come the accessories - a dock for viewing, as well as a dock with a built in keyboard. It charges iPod and makes it look like… a laptop again. And the third accessory is a case that doubles as a stand for the iPad.
11:20 am: Worldwide availability in 60 days. For the 3G models, it’s 90 days.
11:19 am: There are some gasps as people applaud at the pricing. It’s $499 for the 16 GB model. For the 32 GB model. it’s $599 and the 64 GB models at $699. If you want the 3G models, add another $130. That makes the top of the line priced at $829.
11:18 a.m. Drumroll, please… Jobs said he has an aggressive price goal because he wants it in the hands of many. The pricing starts at $499.
11:16 a.m.: Here comes the recap. ITunes is great, he says. Email is fantastic. It’s a great way to enjoy music and video. It’s “phenomenal.” Yadda yadda yadda… But how much is it?
11:15 a.m.: No international deals ready yet - but Jobs says he hopes to have them in place by June. But all iPad 3G models are unlocked and uses new GSM micro SIMs - so there’s a chance it “just might work.”
11:13 a..m. Jobs says it’s not just WiFi but also 3G. But what will it cost. Jobs calls it a breakthrough. There are two plans - a 250 MB data plan per month for $14.99 a month and an unlimited plan for $29.99 a month. And it’s on AT&T, not Verizon. But AT&T is throwing in free use of AT&T WiFi hotspots. Oh, and there’s no contract. You can cancel anytime you want.
11:12 am: Jobs is back on stage. The iPad syncs with iTunes on Mac or PC, just like the iPhone. All of the stuff you sync with the iPhone - music, photos, contacts, apps and more - shift over.
11:10 am: Schiller’s demo of iWork is complete. The apps are $9.99 each. They are compatible with Mac versions and connect to projectors. It’s interesting that the broke the apps out the suite to sell individually.
11:08 a.m.: I certainly hope Verizon joins Jobs on the stage to tell us that they’re partnering. I suspect the hype was bigger than the announcement - but again, holding back full judgment til I see price.
11:03 am: Schiller’s demo of iWork is impressive. There are a lot of cool features in the Keynote (Apple’s version of PowerPoint) but it feels like Schiller is talking more about Keynote, instead of iPad. Oh sure, some of these features are probably enhanced for the iPad but the focus here feels more on the software instead of the hardware.
11:02 a.m.: Initial thoughts: This is a keyboardless laptop/oversized iPhone. ok… it’s got a bigger screen but I’m not paying big bucks for something like this.
10:59 am: Apple’s Phil Schiller takes the stage to talk about iWork and the ability to bring these apps to this device. There’s a new verson of Keynote presentations software, as well as Pages and Numbers (Apple’s version of Word and Excel.)
10:58 a.m. Now we’re talking about the iWork productivity apps on the iPad. Let’s talk pricing here. I don’t see this for $800 and I’m a Mac guy.
10:57 am: Users can change the font and font size of the book’s text, as well. And that is iBooks - a great reader and a great online book store. The company uses the epub format.
10:56 a.m. The book store looks a lot like iTunes or the Apps store. Users can browse books, read reviews of a book, read a sample or just buy it - and the book downloads to the virtual “book shelf.” Tap on the book and it pops right up on the screen.
10:53 am: Steve returns to the stage and now we’re talking e-books. There’s an image of the Amazon Kindle on the screen but taken it further. The new app is called iBooks. It comes with a bookshelf. There’s also a new books section in the store. It has five of the largest publishers supporting, including Simon and Schuster.
10:50 a.m.: The last demo comes from MLB.com. The company said they realized they couldn’t just shift the iPhone app to the iPad. They needed something better. It has a lot of extra features that allows users to interact with more - including a pop-up screen with live video. This app is the first I’ve seen that could make the iPad a rival to traditional TV. The screen is crisp and clear for a ball game.
10:48 a.m: Each of the demonstrators have said that they’ve been working on their apps “for about three weeks.” On stage now is Electronic Arts and the demo of Need for Speed. It’s a cool interface and the folks here say it’s intense to be playing a game on an HD screen so close to your face.
10:47 am: Uh-oh. The guy doingt the demo of Brushes says that the app will be available “at product launch,” our first hint that this is not a product that will be in stores today.
10:46 a.m. The next demo comes from Brushes, an iPhone painting app used to create art with fingertips. Brushes on the iPad feaures ful-screen images, as well as slideshow features that include teh ability to share. By pinching, the zoom is 32x.
10:43 am: The New York Times is now on stage to talk about The Times on the iPad. The company is developing a special app for the iPad that captures the feelings of a newspaper in a native application. The demo shows that it looks like a newspaper again. The interface allows users to launch slide shows, zoom to increase font size. and even run video in a smaller window in “the paper.”
10:41 a.m.: Gaming demo time.
10:39 a.m.: Forstal says all the UIs were written to make the apps look better on the larger screen. The company has revamped the iPhone SDK for developers, which is available today. Includes an iPad simulator so developers can run them on their Macs. The company is going to highlight apps built specifically for the iPad. The company says it invited a few developers to build apps for the iPad. First up to demo is Gameloft. Mark Hickey from Gameloft is on stage to talk about what they’re doing to enhance the game for the iPad.
10:34 am: As Forstall demos some apps, he plays a game that actually has great visual display on a larger screen. The iPad syncs with iTunes so all of your iphone apps are on iPad.
10:32 a.m.: The iPad was built to run all of the apps without any changes. Unmodified is the word they used. On screen, there’s a “2x” button that helps scale the application up to full screen.
10:27 am: The demo is over. There’s some applause and cheers. Steve notes, though, that watching it is nothing like holding one in your hands. Here’s some info on iPad. It’s half inch thin and weighs 1.5 pounds. It has a 9.7 inch IPS display. It offers full capacitive touch screen. Its powered by own custom silicon. 1GHz Apple A4 chip. It has a 16, 32 or 64 Gigabyte of Flash Solid State storage. It comes with 802.11n WiFi and Bluetooth. It comes with a speaker and microphone and 30 pin connector. Battery life is 10 hours.
Steve says he can fly from San Francisco to Tokyo and watch video on single charge. It has over a month of standby battery. It’s environmentally-friendly, of course.
10:25 am: Now, we’re looking at videos - TV shows and movies right out of iTunes. Where are all the content partnerships? Maybe there’s still an e-reader app we haven’t seen yet.
10:23 am: Jobs is still doing the demo. We’ve seen iTunes, Calendar, and now Maps. The calendar is nice. Maps is cool, too - but again, it doesn’t seem to offer much more beyond what the iPhone is offering. And interestingly enough, it still appears to be Google Maps - not Bing.
10:21 a.m.: Jobs is showcasing a cool slideshow feature in the photos app that I’ve never seen before. OK, it’s cool but…Will people buy a bit iPhone? That’s the question. so far. I dont see it - but there’s got to be more coming…holding back my judgment.
10:15 am: Jobs is surfing the Web - New York Times, Time Magazine and so on. But these aren’t “apps.” This is just mobile Web. Now, he’s checking some e-mail - looks like Apple Mail on an iPhone. Then he jumps to photos. Again, it’s nice but other than a bigger screen, it doesn’t feel much different than an iPhone - except for the bigger screen.
10:14 a.m: That’s an overview of what it can do but there’s nothing like seeing it. Steve sits down on the leather chair with his iPad. The lock screen is like the iPhone’s. Jobs sits down on the leather chair with his iPad. He’s surfing the NYT on it.
10:13 a.m.: Steve calls it a “dream to type on.” My two cents so far: sure, it looks nice but it looks a lot like an oversized iPhone. the apps - mail, web, maps, etc - all look like the iPhone but on a bigger screen. The iTunes store is built into the iPad.
10:11 a.m.: It has a squared screen. Looks like iPhone interface. Jobs has one on stage. Here comes an overview: It’s thin and you can change the background screen. You can browse the Web with it. “It’s the best browsing experience you’ve ever had. Holding the Internet in your hands. It’s an incredible experience.”
10:09 a.m. If you’re going to do something like that, has to be better. Some people thought that was a netboook but Steve says netbooks aren’t better at anything. They’re just cheaper laptops. Here it comes….
It’s called iPad
10:07 a.m. Enough history. Now it’s time for main event…sort of. Before we get to the news, let’ reflect on the evolution of laptops, going back to 1991. Just a few years ago, Apple invented the phone with the iPhone. “All of us use laptops and smartphones now. The question has arisen, is there room for a third category of devices in the middle. something between a laptop and iPhone?”
“Something new has to be better at things like browsing the web. Doing email, Enjoying photos. Watching videos, playing music, playing games, reading e-books.”
10:06 a.m. A little history lesson. Apple started in 1976 - old pic of the two Steves. For the most recent quarter, there was $15.6 billion in revenue - from three product lines: iPods, iPhones and Macs. Most are now mobile devices. Apple is a mobile devices company. “That’s what we do.”
By revenue, Apple is now the largest mobile devices company in the world. Bigger than Sony’s mobile devices business and Samsung’s too. By revenue, it’s bigger than Nokia, too.
10:04 a.m.: Starts off with a few updates:
- 250 millionth iPod sold a few weeks ago;
- 284 retail stores now;
- 50 million visitors to store in last quarter;
- Pic of NYC upper West side store.
- There are now over 140,000 apps in app store.
10 a.m: Jobs has hit the stage. Standing ovation and applause. He’s wearing jeans black shirt. “I want want to kick off 2010 with truly magical and revlutionary product today.”
January 27th, 2010
Steve Jobs demos iPad Web-browsing features
Apple CEO Steve Jobs sits down with the new Apple tablet and shows off its Web-browsing, e-mail, and keyboard features. Also: Meet the iPad: Apple goes aggressive; $499 lowest price point
Larry Dignan is Editor in Chief of ZDNet and Smart Planet as well as Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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