Monthly Archives: April 2010

HP answers Palm Code Blue

New Icon on Palm Web OS Smartphone?

The Smartphone business has been very busy this week.  One day before Verizon officially releases the Droid Incredible (I am tracking mine via Federal Express), HP scoops in and acquires Palm.  Palm does have some pretty good technology and mobile handset know-how.  Do they have $1.2 Billion worth?  HP says yes and, anyway – that’s just a rounding error for them.

If you have seen the Web OS on Palm’s devices you have to be impressed.  Why this really makes sense for HP is that it is so much more than Smart Phones.  Perhaps you noticed that Apple iPad launch last month?  Tablet and netbook computing are the next disruptive technologies.   The Palm OS will likely make a bigger near term impact on HPs tablet and netbook devices.    This is not good news for Microsoft.

The OS landscape for the sub-laptop market is rapidly fragmenting.    Android from Google, Chrome OS (Google competing with itself?), Web OS from Palm, Apple OS4, Windows 7,  Windows 7 mobile,  RIM and Symbian (Nokia).   The environments that appear limited in scope are RIM and Windows 7 mobile (just SmartPhone) and Windows7, Chrome OS (Netbooks). Android, Palm Web OS, Apple OS and Symbian all provide (in theory) a unified sub-laptop platform.

What’s a developer to do?    Can an OS thrive with a single hardware vendor – Steve Jobs would certainly say yes, so why not HP?

The near term loser is likely Microsoft.  By the time they have Windows Mobile 7 devices in the market, HP/Palm should have been able to iterate an upgraded device and spend significant marketing bucks attracting both consumers and developers.

All of this competition is good for innovation and good for consumer price points.  It will take at least another 3-4 years for this market to shake out completely.  When the dust settles you can count on Apple and Microsoft still standing – their present overall positions in OS technology are virtually unassailable.  What will be interesting is their relative market strength in this very interesting sub-laptop market.

If you dominate this new market you are THE company for the next generation.

HP has placed their chips on the table.  Who is next?

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Filed under Acquisitions, blackberry, cloud computing, iPad, iphone, Ipod, microsoft, mobile, mobile advertising, Mobile Application Stores, netbooks, Nokia, smart phone, Smartphone, Social Media, Verizon, wireless

Appvertainment from Jobs-Apple and the iAd

The announcement of iPhone OS4 changes the Smartphone  world – yet again.  As Steve Jobs described the 7 tent poles of the new iPhone/iTouch/Ipad OS, it was clear that the tent was not quite large enough for everyone. The center pole of this tent is clearly– iAds.

The raison-d’etre  for the much heralded multi-tasking feature is Appvertainment.  (e.g. iAds).    Do not be distracted by the fact that he introduced multi-tasking first and iAds last.  They are intimately linked.

Apple is pursuing their app centric  vs. search (Apple vs. Google) strategy for smartphones  through the introduction of their own OS integrated  ad serving technology.  Multi-tasking is the key component in this ad strategy to permit a user to return to an app after an ADHD moment is fulfilled by playing with a cool appvertainment.  Without multitasking you lose your application state/status and have to start over again.  Jobs is trying to change user behavior and reward users for clicking on an ad with an engaging experience, instead of punishing them by having them have to re-start their app.

Appvertainment targeting was not discussed. The social  and geolocation information that the host apps maintain on users will most likely be used for targeting purposes.  The Apple social game network API will no doubt  be used for providing this targeting information for game hosted appvertainments .    Apple is betting that App hosted ads will be valuable than Internet style search ads.

Jobs boosted that the Apple platforms would be capable of serving 1 billion app-ads per day by the summer of 2010.  Even if we cut that number in half and apply a modest $10/CPM ad rate – that represents daily gross appvertainment revenue of  $5M.  Apple’s vig on the ad revenue is 40%.  This is easily approaching a $1B+ annual revenue opportunity for Apple.

Click for full commercial

Another interesting aspect of this strategy is that Apple is clearly focusing on large brands and advertising agencies – in other words, the folks with the largest budgets.   This clearly makes sense.  The cost of an appvertainment production can easily be in excess of $250K+.  The inclusion of integrated and compelling video with engaging interactivity is not the domain of amateurs, but rather professional digital agencies.  The examples that Jobs demonstrated during his presentation (Nike, Disney and Target) are all major national brands with large budgets and big Madison Avenue agencies.

As I watched the presentation another thought came to mind –  “Is this legal?”  What would happen if Microsoft integrated a proprietary ad serving system in their OS and demanded 40% of the revenue of every ad served on a Windows machine?  This topic will clearly be discussed in the blogosphere and perhaps courtrooms in the future.

Did anyone hear a mention of sharing ad revenue with Mobile Carriers?

Another  “pole” of significance is the enhanced suite of enterprise features. Corporate CIOs have had a set of killer issues that prohibited the iPhone from significant corporate sanctioned and supported utilization.  Apple is trying to remove these roadblocks with OS4.  In addition to the enhanced  security and email capabilities is device management.  Device management includes the feature of permitting corporations to load their own private apps on the iPhone.    The execs at RIM should be concerned about their Blackberry franchise.

Apple would not be investing in enterprise features while maintaining an exclusive relationship with AT&T.  OS4 changes Apple from the Trojan Horse of a sexy consumer device on AT&T to a machine poised for world domination.

The competition between Google and their Android platform and Apple will only get fiercer.  Nokia is the only other global player who can play at this level.   Palm, RIM and even Microsoft will fight for the leftover niches.  It is a battle of the controlled and planed eco-system of Apple vs. the Open-Source world of Android.

The Apple tent has room for enterprise applications, has a new revenue source for app developers, and embraces big brands, ad agencies and publishers.  Adobe (no Flash support) and Google are outside the tent of OS4.  Microsoft got the biggest slight in this announcement as their mobile efforts were ignored as though not relevant.  And what about the mobile carriers?  Do they exist in the Apple world? Continue reading

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Filed under advertising, android, Apple, AT&T, Beezag, blackberry, facebook, Google, iPad, iphone, Ipod, iTunes, location based services, management, microsoft, mobile, mobile advertising, Mobile Application Stores, mobile commerce, mobile games, netbooks, new media, Newspapers, Open Network, opensource, pirates, smart phone, Smartphone, Social Media, social networking, Steve Jobs, Twitter, Web2.0, widgets, wireless

iWant my iPad – iJust don’t know why?

With the much anticipated launch of the iPad, I stepped back from the hype and techno glitz to ask the question,”Is Apple making the same mistakes of 25 years ago?”

The macro headline for Apple of that time would be “Great Product, lack of licensing and eco-system cedes market to Microsoft” So what’s different this time and what is the same?

The differences are that Apple, under Jobs is an innovation engine that is inventing new product classes – iPod, iTouch,  iPhone, iPad, etc.  The new products are launched and live in a ecosystem  under a benevolent dictatorship (or is it?).  One architecture, One way of getting apps, ads or “tunes” through their closed garden eco-system.  Everyone pays a tax to Apple to play.  This works as long as there are not viable alternatives to the Apple product.

In the case of the iPod, Apple’s eco-system became so powerful that it all but squeezed out all comers. Does anyone own a Zune?  The iPhone, however,  will likely be a different story.

The iPhone was the techno-product equivalent of a genetic mutation, the first of a new species.  It leveraged the eco-system of the IPod , then enhanced it with a vibrant app store.  So what’s the problem?   Apple’s problem is that Google is not the Microsoft.

The Android Platform will mutate and evolve dozens of times a year.  The Apple Iphone is on pace for one major release a year.   Add to this mix Nokia’s Symbian platform, Palm, Blackberry , and yes even Microsoft – and the challenge to Apple’s smartphone bonanza is formidable.   The challengers permit innovation from many hardware vendors  ( HTC, Samsung, Motorola and LG  to just name a few).  The innovation of smartphone products with a common eco-system(s) (Android, Symbian, Nokia, etc) will be more than Apple can bare.  Their share will become a significant but much smaller niche.  This will happen unless the iPhone OS is permitted to evolve outside of Apple.  Since the history of Apple is to control their value chain, this is not likely.

But have no fear you Apple devotees.  Apple’s respond is to morph new species, not new versions of an old one.

Thus enter the iPad – Not a netbook, not a laptop, not an iTouch….  It’s something new- and yes it leverages the vibrant iPhone eco-system,  Another key aspect of the iPad strategy is cloud computing.  The more your “stuff” is stored online , the less you need mass local storage.  Ironically a leader in this space is Google with their Google docs.   I recently purchased a Netbook for around $250.  Rather than double that investment with a version of Microsoft Office, I use Google Docs.  For most use cases it works great and all the docs are backed up – check that – live on the net.  If the iPad is going to squeeze in between netbooks and laptops, it has to have cloud computing for email storage, simple “office-like” apps and document storage.

Is there room in this Darwinian e-volution tree for this hybrid being?  Apple is betting yes – and if successful it will provide them another 5 year run before competitors really catch up.  In the mean time, they invent a new product category, while the previous product hits start to get caught and even surpassed from a market share and innovation standpoint.   Apple cannot afford to compete in every e-category of consumer products with 100% of the innovation – no company can compete with the entire industry.

The secret to this strategy is not to suffer from innovators dilemma.  Apple seems very content to re-invent products categories, even if they diminish the position they have in a previous market.  It is hard to come up with many examples that rival such a strategic culture.   Rather than invest in two more iPhone iterations or faster innovation on an Ipod – they re-invent them all.  This is the truly amazing aspect of Apple and can only come directly from Steve Jobs.  They bet the company on continued hit products.  The strategy works as long as the hits keep coming and Jobs remains at the helm.  Apple would not have been able to sustain a “Vista-like” disaster and have a flagship product be a complete bomb for years.

So – now its off the Apple store to buy my iPad.  Why?  I don’t know – but I’m sure I’ll like it when I figure it out.

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Filed under advertising, android, Apple, cloud computing, iPad, iphone, Ipod, iTunes, mobile