Technology Growth fueled by "iPad"?

December 6, 2009 By Leave a Comment

According to research group IDC, technology spending will increase in 2010 as part of a global economic recovery. A major factor in this increased spending will be the growth of mobile Internet devices such as the Apple iPhone … and the Apple “iPad”?

Basically IDC is predicting that Apple will release a tablet computer, as so many rumors are predicting as well. If true, this could be another huge hit for Apple and could disrupt the technology market. So stay tuned.

But equally important for all businesses to take note is that if technology spending is up, that means that your competitors are likely improving their infrastructure. If you don’t keep up your technology, you will fall behind in the marketplace.

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No Soup for You!

November 4, 2009 By Leave a Comment

With all the buzz surrounding the Droid and Verizon’s counter-iPhone advertising campaign, many industry analysts are clamoring for Apple to release their iPhone on Verizon’s network. Others are reporting various rumors that Apple is ending their exclusive arrangement with AT&T or will be releasing iPhones for Verizon in 2010. Up until this point, I believed that Apple would not release an iPhone for Verizon until at least 2011. But even I was starting to be swayed by all the hype into thinking that maybe Apple would release an iPhone for Verizon in 2010. That was until I read this excellent article detailing how successful Apple has been with their single-vendor strategy.

The article is rather long and detailed, so I’ll sum up some of the main points here:

1) The technology in Verizon’s current network (CDMA) is different than what AT&T uses (GSM), so it would require designing a new iPhone, along with all the regulatory headaches, and then would require Apple to split their manufacturing, hurting their economies of scale. This would all be for a technology that will be obsolete in a few years. The next generation (4G) of Verizon’s network (LTE) will be the same as AT&T’s, but that will likely not be built out sufficiently until 2011 at earliest.

2) Comparison to Blackberry sales, which are sold on multiple carriers, shows that Apple is neck-and-neck. Apple simply doesn’t need to sell on multiple carriers at this time.

3) Apple would do better growing their global market than trying to capture the Verizon market in the US. Why should Apple spend their resources on a much more technologically challenging and expensive project like a Verizon iPhone, when they can keep their focus on getting more customers in the global GSM market?

4) One reason Apple has been successful is precisely because they followed a single-carrier strategy. This allowed them to dictate more favorable terms, simplify their product lineup, and successfully execute a focused marketing campaign. Other vendors must cede concessions to the carriers, have complicated product matrices, and fracture their marketing efforts across those carriers and products. Had Apple simply copied the more established vendors’ strategies, they would likely have been just another phone vendor. Instead, Apple chose not to follow the herd and single-handedly created an entirely new market.

The article also notes that Google’s strategy for their Android phones is reminiscent of the old, failed way. This does not bode well for success against the iPhone.

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These Aren't the Droids You're Looking For

October 26, 2009 By 1 Comment

The current Droid teaser ads assert a few points. I’d like to discuss each:

iDon’t have a real keyboard: This has been a common complaint about the iPhone since day one. Honestly, I had serious concerns about the iPhone not having a real keyboard myself when it was first released. And when I first used my iPod Touch (essentially the same thing as an iPhone for purposes of the keyboard) I had some difficulty with it. But the more I practiced, and with each update to the iPhone/iPod Touch software, I got much more efficient with the virtual keyboard. Now I feel completely comfortable with it. And I have observed users who are insanely fast typing on the iPhone – with one hand even! I believe that most people who complain about the iPhone virtual keyboard have never used it or have only given it cursory usage.

But it doesn’t really matter what technical people like myself think. As far as marketshare goes, what is important is what the mainstream user thinks. I believe most mainstream users don’t really understand the relative merits of a “real” keyboard as compared to a virtual keyboard. But if a commercial like this makes them wonder about it, they’d just ask their iPhone using friends (of which they have plenty because smartphone users tend to flock together). Those friends would mostly say that they don’t really have a problem with the iPhone’s keyboard. And that would be the end of this argument in their minds. Score: iPhone 1 – Droid 0

Another point often overlooked about the iPhone’s virtual keyboard is that it can be easily customized for each language. So the exact same iPhone hardware that is manufactured for the US market can be easily loaded, for example, with the Chinese language software. This allows Apple to take advantage of massive economies of scale and worldwide ubiquity. Android phones made by many different manufacturers will need to be custom built for each language they support. This will make it difficult for other phone manufacturers to make as much profit as Apple does from each of their iPhones.

iDon’t run simultaneous apps: There’s nobody who appreciates geeky technology better than me (my wife would say there’s no bigger geek). And I certainly appreciate the ability to run simultaneous apps. But really, in using the iPhone, I can’t honestly say that the lack of running apps simultaneously has bothered me much. While simultaneous app usage is great on a desktop, I don’t think it translates quite as well to a handheld device. Apple’s position is that simultaneous apps can drain battery life (more on that later). That argument is yet to be proven with the Palm Pre and Google Android devices, so we’ll see. But once again, what does the mainstream user think? I think that most users have little concept what “simultaneous apps” could do for them, so this argument just goes over their head – and probably turns them off in the process. iPhone 2 – Droid 0

iDon’t take night shots: This argument is pretty specific and could be pretty effective. But how many smartphone users care that their phone can take night shots? Certainly the geekier among us can appreciate this feature. But I believe most users will think, “that’s neat” and not much more. iPhone 3 – Droid 0

iDon’t do open development: Ummm … yeah. Who cares? What does this even mean? Once again, geeky types might get the warm and fuzzies over this, but the average user has no idea what open development means for them. iPhone 4.5 – Droid 0 (I give the iPhone 1.5 points on this one because this argument is just so weak).

iDon’t customize: Really? I think the iPhone is pretty customizable. But hey, I’m just an average user (well, not really, but close enough). I think the mainstream user would find this confusing. What exactly is customizable? “Oh well, I guess I’m just not smart enough to know what that means so I’ll just ignore the Droid”. iPhone 5.5 – Droid 0

iDon’t have widgets: Honestly, I had to look this up. I wasn’t quite sure what Android widgets were (they weren’t part of the first Android release). And yes, I’m a super-geek as my wife would attest. So if I wasn’t clear on the whole widget concept, how is the average user going to know? Basically, once again, this goes over users heads and possibly turns them off to the whole Droid concept. iPhone 6.5 – Droid 0. Ironically, one of the concerns about widgets is that they may drain battery life, which leads to the next point.

iDon’t have interchangeable batteries: Yet another argument that has been around since day one of the iPhone. So far it hasn’t seemed to hinder iPhone adoption. I theorize that this is because the iPhone’s battery life is more than adequate for most users. Other users can fairly easily charge their phones at least once during the day (the iPhone seems to charge quite quickly). And for those who really need more battery life, there are third party products that can augment the iPhone battery. I believe that most users who own phones that have interchangeable batteries never purchase another battery.

Apple has proven with their MacBook laptops that by designing a battery that isn’t user interchangeable, they can increase the runtime as well as the lifetime of the battery. This is often overlooked by those that argue against the iPhone battery. Sufficient runtime and lifetime of a battery can negate the need for interchangeability. On the counter, if the software is not efficient (simultaneous apps and widgets?), it can increase the likelihood of needing an extra battery.

So far I’ve been fairly harsh on this ad, but let me state what I do like about it. It is clear and concise and plays on the perceived strengths of the Android platform. It isn’t the “100% You” blather that T-Mobile is putting out there, and it isn’t the touchy-feely existentialism that the Palm Pre phone ads portray. Combined with the “pick your network” ad campaign, this looks good for Verizon. The question is just how good?

Overall, I think this ad suffers from the same problem as the Palm Pre ads – they seem to be written by geeks for geeks. Sure the iPhone has a lot of geek appeal, but Apple knows they don’t need to sell to that market. The iPhone has been successful precisely because it targets the mainstream in features, ease of use, and marketing. It seems the other guys haven’t yet figured this out. Until they do, I don’t believe they’ll have much success.

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You Can Pick Your Friends …

October 24, 2009 By 2 Comments

I’ve observed that Verizon has been running an ad campaign for a couple of weeks subtly attacking the iPhone. The campaign basically claims that Verizon’s network is superior to AT&T’s network by such a large margin that you should forget about any phone that doesn’t run on Verizon’s network. As they claim, “before you pick a phone, pick a network”. Obviously, the underlying message is “forget the iPhone – it doesn’t run on Verizon”.

I think this is actually a very good campaign because the message is clear and Verizon is playing on the perceived strength of its network. It can definitely make people think twice about buying an iPhone if they have any qualms about AT&T’s network. The question will be if the message resonates with enough people to put a dent in iPhone sales. I believe it boils down to whether or not people are more swayed by the marketing of a network or the marketing of devices. Personally, I think it is pretty clear that the mainstream is more apt to gravitate to an exciting, fun device than the relatively boring technology of a wireless network.

I think Verizon realizes this, however. What should not be missed is that Verizon has recently started the Droid campaign. It seems that Verizon is attempting a one-two punch at the iPhone. 1) our network is much better, and 2) we have devices that are better than the iPhone. I’ll write more on the Droid campaign in another article. The question for now is whether Verizon actually believes that Google Android phones are better than the iPhone, or if they are using this campaign to pressure Apple into releasing an iPhone on their network. Likely, Verizon knows that this strategy is their best chance of success either way.

If Verizon grows its customer base large enough with this campaign, they are in a much stronger position to negotiate with Apple, if they feel they even need the iPhone anymore. If enough customers switch away from AT&T (and the iPhone) because of their network, or if Google Android phones start to develop a significant enough following on Verizon’s network for Apple to notice, then it puts pressure on Apple to develop iPhones for Verizon’s network. The risk to Verizon is if this campaign isn’t very successful, it cements the iPhone’s dominance in the market and puts Apple solidly in the driver’s seat in any negotiations.

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But Sir, Nobody Worries About Upsetting a Droid

October 19, 2009 By Leave a Comment

A couple of weeks ago, Google and Verizon announced a partnership to co-develop a series of phones based on Google’s Android platform. Just this weekend, a marketing campaign attacking the Apple iPhone was launched promoting the Verizon “Droid”. Thus, many are prognosticating, the opening salvos been fired in the first serious competitive threat to the iPhone.

There are many, many articles on the web that talk about nearly every angle of this topic ad nauseum. So I won’t rehash any of those articles. For me, what this “battle” will come down to is which business model resonates with the market better. The iPhone model: where Apple has tight control over the entire platform from hardware to software. Or the Android model: in which Google develops the software platform and leaves it up to other vendors to implement the hardware.

Up to this point, the iPhone has succeeded exactly because Apple was able to develop a device they had total control over, resulting in a very easy to use product that brought smartphone features to the average user. It will be interesting to see if Google’s model of more open development will result in devices that are as slick or polished, are as easy to use, and that will create the type of affection among its users that the iPhone has. It will be this, not tech specs or marketing campaigns, that will determine which smartphone will be the dominant player for the next several years.

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Carl Sagan Would be Proud!

September 28, 2009 By Leave a Comment

Carl Sagan was known for the phrase “billions and billions”, which ironically he claims to have never actually said. And among those who know Apple’s history, he is also known as the “Butt-Head Astronomer“, due to an infamous legal clash he had with Apple. But let’s just ignore the facts and pretend the title of this article is completely appropriate, as Apple has announced today that their App Store has passed the 2 billion download mark. It took nine months for the App Store to pass 1 billion downloads and now has only taken about 5 months to do another billion.

What does this mean for the average consumer? Not much at this point, but what is important to keep an eye on is whether the Apple App Store will so completely dominate the market that it stifles development for other mobile platforms (similar to what Microsoft Windows did in the 90’s). Another important thing to keep an eye on is how news like this affects large corporations in their implementation of the iPhone. Many IT departments are still very resistant to supporting the iPhone in their companies and the battle between users and IT over this topic is interesting to keep an eye on. As I referenced in my earlier article regarding the control of technology in companies, the role of IT departments is changing and the iPhone is one of the defining moments in this trend.

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M-M-M-M-MMS

September 25, 2009 By Leave a Comment

After much anticipation, Multimedia Messaging Service (MMS) has been enabled on the AT&T network for iPhone 3G and 3GS owners (sorry – original iPhone users are left out). There was much dismay when Apple announced that the iPhone 3.0 software would support MMS, but would not be available in the US until AT&T would allow it. AT&T claimed that they were preparing their network to handle the expected flood of MMS traffic. Most of us just assumed that MMS usage would greatly increase the traffic on AT&T’s network. However, a very interesting article questions that assumption.

Notably, the article argues that MMS has been available for years on other phones and has not been used very much. In fact, MMS only made up 2.5% of all messages sent in 2008. So it wouldn’t seem that MMS on the iPhone should add all that much traffic. Yet AT&T expects “record volumes” of MMS traffic now that the iPhone has MMS. The article also mentions that one factor in the lack of acceptance for MMS has been the unwieldy interfaces of other phones. The iPhone definitely makes it a lot easier to send MMS messages. So after all is said and done, this situation becomes an interesting case study in how user interface affects the acceptance of technology. As usual, stay tuned …

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T-Mobile Needs to T-ry Again

August 26, 2009 By Leave a Comment

I just saw a T-Mobile commercial for the myTouch 3G smartphone. It features Whoopi Goldberg, Phil Jackson, and Jessie James passing around the phone. The tagline at the end of the commercial is “The first phone that becomes 100% you”.

My wife didn’t see this commercial but I’m sure she would have said, “everyone in that marketing department needs to be fired”, as she often does after watching a bad commercial. I would wholeheartedly agree with her in this instance.

Now to be fair, from a technical standpoint and what I know about the phone and the Google Android platform, the myTouch 3G is a nice phone with some nice features. But let’s face it, nice phones don’t win. Not since the iPhone come on the market at least. Marketers must face the stark reality that nearly everyone will compare their product to the iPhone and you don’t get a second chance to make a first impression.

I think most average users will see a commercial like this and yawn. Great, more celebrities. They’re passing around a phone. Cheesy music in the background. The phone can show pictures and video – been there, done that. What the heck does “becoming 100% you” mean? Why should I spend a second of my time considering this phone instead of the iPhone?

If phones like this stand any chance of being moderately successful, the marketing efforts surrounding the phones need to focus on showing users how the phones are better or at least on par with the iPhone. They need to show how the phones solve everyday problems quickly and elegantly. Basically, instead of trying to reinvent the wheel, they just need to copy the formula of the iPhone commercials for the near future. Of course, this doesn’t often play well with marketing departments, so look for my wife to continue to call for more mass-firings.

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Apple iPhone to be Released on Sprint Network

August 23, 2009 By 7 Comments

According to various rumors on the Internet, Apple is planning to release their iPhone on the Sprint network as early as next summer. While nothing has been confirmed, the news has surprised a lot of industry experts, who had been expecting a possible announcement for the Verizon network, if anything at all.

Now before I continue this story, I must wonder how many of you are reading this with various levels of excitement and anticipation. Did the headline grab your attention? Did you think to yourself, “this is really big news” or “I’m on Sprint and now I can have an iPhone!” Are you still in a state of disbelief?

Well, I hate to break it to you, but the headline and first paragraph are completely made up. Let’s just call this a little experiment testing how strong of a hold the iPhone has on the market. Please read on and see if you can help me with my experiment!

I had this idea as I was contemplating an article that shows sales of the Palm Pre have slowed since its launch in June. If the findings by Wall Street analysts are correct, it would seem that the Palm Pre simply filled some pent-up demand for an advanced smartphone in the Sprint market. Likely, the Palm Pre sold well among more technical users but not much beyond that. Why isn’t the Palm Pre selling well? Is their marketing not hitting the mainstream market as I’ve theorized in two previous articles (Pre-view, Pre-judging Palm’s Ads)? Or is the mainstream simply not interested in the Pre? If they aren’t interested in the Pre, is it because they really want an iPhone instead?

While this “experiment” is far from scientific, I would like you to comment on this article, sharing your initial reaction when you first thought that the iPhone would be available on Sprint’s network (and then what you thought when I revealed it as a hoax!). I’m curious what an average person on the street thinks of the iPhone and its competitors.

Another thought that crossed my mind was that if Apple really wanted to kill the Pre, all they would need to do was float a rumor that the iPhone would be available on Sprint (or Verizon or any carrier that doesn’t yet have the iPhone but has or will have the Pre). My theory is that many people would hold off on purchasing a Pre if given the possibility that an iPhone was around the corner. I wonder if people are doing it anyway, not knowing that the odds of an iPhone on Sprint are very slim for the foreseeable future.

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Pre-judging Palm's Ads

August 5, 2009 By Leave a Comment

Being a business owner, I take an interest in observing how companies market themselves. Being in the technology business, I take a even keener view how technology companies market themselves. This is why I’ve written a few articles about Palm and Sprint’s marketing of the Palm Pre smartphone.

I’ve watched the latest series of Pre ads over the last couple of weeks. The thing that struck me was the abstract nature of the ads. They feature a young woman sharing various deep thoughts about her Pre. Honestly, I didn’t think they were very good because I thought they lacked substance. I don’t think the “existential” nature of the ads are very effective in giving people a reason to go out and buy a Pre.

I purposefully didn’t say anything about the ads to my wife, as I wanted to get an unsolicited reaction out of her. She is a business consultant, so I take her opinion on matters of marketing seriously. Sure enough, just a couple of days ago, she noticed the ad and commented that it was the worst ad she had ever seen in her life. Now, granted, she uses the phrase “… ever seen in her life” quite a bit, but the fact that she said it means she feels quite strongly about it.

I must wonder, who is Palm trying to attract with these ads? Is the market segment that is influenced by “touchy-feely” ads the same market segment that will run out and buy Pre phones? Is this market segment large enough? Apparently, there are many people that feel these ads are actually creepy and/or annoying.

Again, let’s compare the Apple iPhone “there’s an app for that” series of ads. They are simple, straightforward, and effective. Apple’s ads can be summed up in this way: “look at how many things the iPhone can do and how easy and cool it is to do those things.” Then of course, there’s the tagline: “There’s an app for just about anything … only on the iPhone.”

On a side note, it seems the latest iPhone ads are much louder than other commercials. Is this a purposely subliminal design by Apple? I’ve certainly noticed the commercials because the initial loudness does interrupt my general lack of attentiveness when TV commercials are running. Then once I’ve noticed them, my inner-geek keeps me watching. If this was done on purpose, kudos to Apple for implementing such a brain-dead simple way to get people to notice their commercials.

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