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Apple’s iPad Will Push Multiple Usage Models

It is quite clear that many people have either a love or hate relationship with the Apple. The Cupertino, California-based brand announced its new iPad tablet device earlier today, and I think there are more lovers than haters at the moment.

It is sleek, it is stylish, it has the expected cool factor. Yes, it looks like a big iPod Touch. It is also missing things like a camera, Flash support, true GPS (unless you get the 3G versions), multitasking capabilities, and there is still a debate if you can do Skype on it (you can do VOIP now on 3G), since Skype is on the iPhone. Will AT&T or Apple prevent people from running Skype on it? I think there would be uproar!

The pricing was surprising. Apple usually leaves room under it for others but this time it did not. Or if it did, it’s not much room. It’s basically a space between $249 (higher end smart phones) and $499. The new price point “wasteland.” The A4 size iPad comes with 10 hrs of battery life from its 25WHr lithium-polymer battery, and starts at $499 with 16GB of Flash storage, which was an eye opener but I don’t think there is much margin there. At $599 you get to 32GB and at $699 you get to 64GB. Download a few HD movies and you are pretty much going to fill up the 32GB model. All those models come with WiFi. 3G connectivity is a $130 addition per model- $629, $729, and $829 respectively. It’s AT&T, despite all the pre-launch rumors about Verizon. The data plan is either $14.99 per month for up to 250MB, which is a useless price point because you will use that up in a week, or $29.99 for unlimited data. The question is if it’s really unlimited data? Some carriers unlimited plans are not really unlimited. And the 3G is unlocked! It’s a pre-pay plan and AT&T is throwing in free access in all of its WiFi hotspots (like Starbucks).

But an unlocked iPad won’t run on T-Mobile’s 3G network, because T-Mobile is the AWS band running at 1700MHz. The iPad is UMTS/HSDPA running at 850/1900/2100MHz. Yes, it will run on EDGE! But trust me, it will crawl! Many people are thinking that the WiFi version will be good enough with the proliferation of WiFi today. They may be right, especially for non-techies. And iPad does appeal to the non-techie crowd. It’s hitting the sweet spot of pop culture- music, photos, videos, surfing, and a little productivity thrown in.

I think the iPad is going to push the market in several different segments at once. Steve Jobs thanked the creators of the Kindle and said, “We are going to stand on their shoulders.” It’s too bad that Apple pushed Amazon into quicksand first. Apple usually decides whom they want to compete and compare themselves to. Steve Job’s other notable comment was “iPods, iPhones and most Macs are all mobile devices – Apple is the largest mobile device company in the world, now. Larger than Sony’s mobile device company, bigger than Samsung’s, in terms of revenue it’s bigger than Nokia!” That was an in-your-face wakeup call to the folks in Finland and Asia! Apple always decides whom they want to chase, and then they shift to a new thing/competitor/segment. The have the tightest hardware and software integration out there, and the most control over both— bar none!

One thing the iPad does really well is function as a big iPod Touch. iTunes is great on it. The second thing is that it’s a better ebook reader than anything else out there. Yes, it has a premium price point compared to Kindle and nook but iPad does so much, much more. And it’s in color. The third thing that it does well is that it plugs into a new keyboard dock. This means you can use it for most of your day-to-day work, as a primary device, and do email and use other productivity apps. This is one thing you can’t do with an iPhone or an iPod, they were too constraining. It’s not a great platform for CS4 or PageMaker. It’s not supposed to be. Again, it delivers in the key core areas of- music, ebook reading, photos, video, games, and the overall online experience. These are elements that Steve Jobs focused on in his speech today. There may be no reason to buy a MacBook Air going forward.

The iPad clearly bridges the gap between a smart phone and a notebook. I have met with countless device OEMs and semiconductor vendors who have tried for years to do this, with netbooks and MIDs (mobile internet devices), and it took Apple to really define the category for everyone. Apple didn’t want to produce a cheap netbook. That’s the approach that all the other laptop vendors as well as a few smart phone vendors such as Nokia took. There is a market for netbooks. Not everyone is bought into the cult of Apple, because of their price points. But the price gap between iPhone and MacBook has narrowed thanks to iPad.

iPad will go toe-to-toe with higher end netbooks ($399 and up) but there will still be room for cheaper netbooks ($199-$299) at Walmart and the price clubs, and heavily subsidized black and white ereaders if the content providers want to keep supporting those other ebook file formats. Apple is supporting the ePUB format. Amazon and Barnes and Noble will need to seriously reconsider their strategies, especially if Apple gets the boatload of titles that everyone is expecting, and applies pressure on ebook pricing like they did with music, TV shows, and movies. They have McGraw-Hill and the textbook market is sitting at their feet. So the iPad for education, especially higher-ed could be big! Watch out if someone cracks the DRM on textbooks! A couple of textbooks today cost more than the iPad. It depends on how close tightly the content is ties to the device.

No camera. And it seems to be the biggest downer to a lot of people. I just don’t think they could get it into v1.0. However, those developers who downloaded the SDK today reported that it has code support for a camera (there’s an “aha! moment”). So a camera will be there at some point. No USB to plug in a web cam either. No iChat. No messaging. We’re not going to hold this thing up to our head to make a call. But it does have a microphone and a 3.5mm jack. It is a shame that you can’t do video conferencing on it. Maybe there is something in the SDK on that, for down the road.

As far as supporting file formats, the iPad supports a bunch, including .doc, .docx, .pdf, .ppt, .pptx, .xls, .xlsx, .rtf, .xtx (see what I’m getting at?). They launched a new version of iWorks today too, and have a custom keyboard on the iPad that works with the software suite. And individual iWork apps will sell for $9.99 each.

No GPS except in the 3G models. I would argue that assisted GPS in the WiFi-only versions is good enough for most people. Assisted GPS does navigation quicker. We can argue about the better part of the equation. The iPhone already has good GPS apps for it, and they will port to the iPad.

I think the iPad is one of the most impressive version 1.0 products ever announced. Does it do everything? No! Are there things missing that many of us would have wanted? Yes, of course!

But Apple planted a seed— an heirloom seed for everyone to look at, and maybe buy. There are many different usage models that are going to emerge around this device:

  • The leanback mode for entertainment, web surfing, and home automation and control.
  • The education mode for not only K-12 but higher-ed as well.
  • The gaming mode with its bright LED-backlit ISP display— OLED still costs way too much for these price points— and ability to use multitouch to control in-game elements. Gaming on iPad is going to put even more pressure on Sony and Nintendo in the portable game player space.
  • The specialty mode, such as an aeronautical solution that can be used for navigation. Someone might put a rugged cover around it for certain environments. I don’t think it’s going to be a pure consumer device. The iPhone isn’t if you starting looking at the applications out there.
  • The executive solution mode because it is a killer presentation device for a road warrior who is on stage a lot.

Will it cannibalize Apple’s MacBooks? Time will tell. But some people today said they might consider the iPad when they go replace their existing notebook.

Like the iPhone, Apple has another product that has the potential to be really big, and again, wake up the industry. It will spur competition, and innovation. People will still need a phone-like device (and increasingly those are smart phones) and they’ll need some other mobile device for a better experience. iPad pushes that second envelope.

I just liked the name “Canvas” better!

Apple Event Live Blogging

Hi-

Randy Giusto here! I’ll be liveblogging today’s Apple Event here. The event’s set for 1:00 p.m. ET/10 a.m. PT/6:00 p.m. GMT. My tweet stream will flow into this post as I curate the event (sorry, we couldn’t get TwitterLiveBlog to work w/the latest WordPress upgrade). It will also flow to my Facebook, LinkedIn, and Twitter pages if you follow me, and to my blog NewDigitalCafé .

If curious— I’ve 3 screens set up (1 iMac/1 Win7). I’m watching feeds – Gizmodo, Huffington Post, Technologizer, and TheStreet (for financial POV).  On PeopleBrowser I’ve a column of trusted industry friends, one of tech news contacts, and one of mobile developers to scan reactions.

Hopefully Twitter stays up! If not, I’ll switch to manual post updates! I will follow up later this afternoon with a summary post of the event!

-Randy

Developers meetup with MassMobile and DrinksOnTap (Jan 25th)

Join Mobile Monday, MassMobile, and DrinksOnTap for a mobile developer’s meetup on Jan 25th.  We’ll meet at Jillian’s near Fenway.  If you have a mobile app you’d like to demo, bring it along.

Date: January 25th, 2010.  Time: From 6 to 8pm +

Place: The ‘Tequila Rain’ Floor at Jillian’s Boston (near Fenway)  145 Ipswich Street, Boston, MA 02215 (map)

Cost: $0.  Cash bar.

This event is organized by:  Mobile Monday,  MassMobile,  Drinks On Tap

Please register now so we know you’re coming.

A view on the Quattro Wireless acquisition

Jeff is a guest blogger for Mobile Monday. He is the former CEO of m-Qube and Managing Director at Bain Capital Ventures.

Of course the Apple acquisition of Quattro Wireless is fantastic news for the Quattro team and its investors, but behind the headlines there is more worth noting. Over the past 5 years there have been countless number of mobile marketing/ mobile advertising companies created but few have been nearly as successful as Quattro. While there is always a bit of luck involved, Quattro had the team to be successful.

It always starts with team, and the Quattro folks are a super high quality bunch. Yes, the founders Eswar Priyadarshan, Andy Miller and Lars Albright are each rock star entrepreneurs, but it goes much deeper. A great senior team is able to recruit amazing talent all around them and the Quattro group is first rate across the board. From engineering to operations, from marketing and sales to product management to administration, the team is deep on domain expertise, driven to succeed and knows their disciplines. Together they knew the wireless ecosystem, had relationships to make progress quickly and equally importantly were skilled at executing in an entrepreneurial fashion.

Great teams are able to shake and bake, move left and right and find the opportunity. Like many successful startups, the final recipe for success is not usually where the company started. Quattro began with an idea to help carriers monetize their inventory with mobile advertising and quickly realized that serving the needs of tier one publishers with a combination of technology and sales would be a better model. The team had their eyes wide open, and like a good running back, saw a hole on the playing field and ran through it.

Being good is not enough, entrepreneurs need to be aggressive. I had the pleasure of working with many of the Quattro team during their previous successful business at m-Qube. These guys know how to get it done and go hard at making it happen. There has been great personal sacrifice made in the name of business accomplishment. In this competitive world, there is always competition ready to step up if you let your guard down. The Quattro team took the lead and never looked backed. They ran harder and smarter then the competition and deserve the victory that they achieved.

Cheers to the Quattro team! Congratulations to its investors who deserve much credit for believing early in the Quattro team and giving them the financial and board support needed to win. And congratulations to another successful wireless win for Boston. Quattro joins the ranks of companies like Starent, Airvana, Third Screen, Enpocket, m-Qube and of course many others. Let’s lift a glass to the Quattro gang for helping to keep Boston a hot spot for emerging wireless businesses. Hopefully companies like JumpTap, uLocate, Rave and Skyhook Wireless and others are right behind them.

Jeff Glass is a Managing Director at Bain Capital Ventures where he focuses on early stage internet and wireless investments. He previously served as President & CEO of m-Qube, where he was responsible for the $250 million acquisition of m-Qube by VeriSign in 2006. Jeff has been voted Ernst & Young “Entrepreneur of the Year” in New England and named to Boston Business Journal’s “40 under 40” list. Prior to m-Qube, Jeff was the co-founder of a number of other successful companies across internet, media and direct marketing. He has an MBA from Harvard Business School and a BA from Amherst College.

Announcing Jeff Glass as our first guest blogger

Today we’re beginning a new series of guest blog posts on Mobile Monday Boston. Most analysts are predicting 2010 to be a turning point for the mobile industry. There’s a tremendous amount happening in the mobile industry in Boston and we hope through this series to bring some new voices to you.

To kick off the series, we’ve invited Jeff Glass to comment on the Quattro acquisition. Having sold m-Qube to Verisign for $250 million, Jeff is in a unique position to talk about the recent acquisition of Quattro.