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Wednesday, January 27, 2010
With the media industry salivating over Apple CEO Steve Jobs' announcement of the new iPad as if it were awaiting an injection of Viagra, you'd think that the machine would do everything except change a flat tire. Well, the hoopla is over, and the iPad is...a large iPhone, essentially. Nice, sexy, though functionally not really a breakthrough device compared to the impact that the original iPhone had on mobile markets. However, then the other shoes started to drop after the klieg lights on the announcement stage began to cool off a bit. The two key factors: price and e-book packaging.

First, the price. At $499, the iPad is coming out at a blow-away price point that will make its purchase an attractive and simple alternative for many people who would otherwise be considering a PC or Mac as their next step-up from a mobile phone - or a slightly more pricey unlocked Google Nexus One superphone. This matters in a big way to global markets, where billions of people who are experiencing Web content for the first time on mobile phones will be looking for their next step-up device for content consumption.

Keep your eyes open also for possible subsidies on this price point as mobile network-enabled versions of the iPad hit the market. Just as King Gillette figured out how to give away razor handles to sell disposable razor blades, Apple will find many ways to lower the cost of hardware acquisition to lock people into their software and ecommerce services. Since the iPad technology and apps are largely warmed-over iPhone components, one assumes that not much R&D was required to launch this model, so there must be a good amount of "wiggle room" in the iPad's pricing for such deals.

Its aggressive price point also pegs the iPad as a highly attractive alternative for educational markets, the original market that launched Apple's growth years ago as a scrappy alternative to then-crude PCs. Given the average college student's expenditures on textbooks, an iPad equipped with ebook versions of those texts that they can use for most other schoolwork along with their favorite entertainment will be a very appealing option. It's also a price point that pretty much resigns most existing ebook readers to also-ran status as cost-effective platforms for people on the go. What do you want at your train or airline seat as a light PC alternative, an ebook reader or something that can also play movies and help you get some emails done? Problem solved.

The other factor that is very appealing on the face of it is Apple's decision to deploy an iTunes-like eBook store with content formatted in the ePub open-standards ebook and emagazine format championed by the International Digital Publishing Forum for several years. Having an ebook reading software package that will, in theory, be compatible with content purchased from any ecommerce service using ePub-formatted content will be a great boost to ebook, enewspaper and emagazine sales. However, the caveat with Apple's use of ePub standards is that ePub leaves the door open for the optional use of proprietary DRM tools, such as those used in Apple's iTunes store and Barnes and Noble's online ebook outlet.

If you're happy using iTunes on whatever platform you're using, then chances are Jeff Bezos over at Amazon just bought himself a huge headache after having alienated publishers with onerous revenue share agreements to get content in Amazon's proprietary Kindle format. I've said it often that the proprietary Kindle format was a dead end, but no more so than today. In a sense I wonder if the publishing industry went along with the proprietary Kindle early on as a ruff of sorts to keep the combination of Amazon, Google and open standards from running away with the entire premium content ballgame while they developed a more palatable alternative. That may be giving the people involved too much credit, but it's curious. Perhaps it's not too late to dust off some of those "GoogleZon" memes, after all.

Now that the book industry and other media producers have an alternative to Amazon's stranglehold on them, it will be interesting to see whether they will find themselves in a new Catch-22 situation. Have they run from Amazon's dominance only to discover that the grip of Apple's DRM on ePub-enabled content winds up being an even worse stranglehold in the long run? Time will tell, as will the details that unfold over the next few weeks regarding the iPad's compatibility with premium content purchased from non-Apple outlets. If it's easy-peasy to pull up content purchased elsewhere in ePub format on the iPad, then publishers will have done themselves a great favor. If they drank too much of Steve Jobs' Kool-Aid and allowed it to be hard to use other DRMed or non-DRMed content via Apple's ePub reader, then it will be a more-of-the same dilemma for publishers overall.

While the media industry seems ready to declare Steve Jobs the next David Sarnoff, their "homeboy" genius of content, technology and human insight, the overall reaction to the iPad by consumers so far seems to be warm but not necessarily hot. If you love Apple products already, then you're probably going to plunk down your five Franklins as soon as you can. If you're a person who's already equipped with a decent PC, an iPhone or Android-enabled mobile device, then you're probably saying, "Oh, a big iPhone, neat" - and then going back to surfing the Web. iPad as a gizmo is nifty, but it's not grown new capabilities that people haven't seen before in one form or another. If you're an enterprise I.T. manager, you're probably saying, "Oh, brother, another device to deal with, thank goodness it's basically just an iPhone" - which may simplify adoption at schools and universities especially.

And if you're a book or magazine publisher, then you're probably feeling pretty good at the moment - but then, perhaps, realizing that Jobs spent most of his demo showing how great it was that the iPad rendered Web pages and YouTube movies so well. Sorry, dear publishers, the Web is not going to disappear just because there's a handy new netbook that does DRM the way that you want it to. The iPad will definitely be a boost for print-formatted electronic content, but this is highly unlikely to address key revenue and cost issues that are ultimately the enemies of many publishers. By the time that iPads start coming out in March (and in April in mobile network-enabled configurations) , competitors will be that much further down the road towards their own cost-effective tablet and touchpad interfaces that are likely to be committed to open standards more aggressively.

Yes, this means that Google is still very much in the mix for premium content. Google's Chrome OS will be available in the next year, and rest assured that this next-generation computer operating system will have some deployments that will be remarkably iPad-like. Already its Android operating system is the basis for Barnes and Noble's Nook ebook reader being shipped in a few days, equipped with ePub-formatted content. Could this alliance form the basis for another end-run around Amazon for book and magazine publishers? It seems that not too long from now we will start thinking of Google and Apple the way that we used to think of television and radio networks, with Microsoft striving to get its own new-generation devices into the mix as well.

In the meantime, there are TiVos, Playstations, mobile phones, ereaders and a galaxy of other gizmos that will keep both the iPad and any other particular device from being a "magic bullet" that will solve the distribution problems of media companies definitively. All hail Jobs, today's knight in shining armor for a content industry still struggling with the realities of the Web some fifteen-plus years after the launch of HTML-based graphic browsing on the Internet. Then let's look at how many gray hairs some of us have gained since that time - and accept that the iPad is just another beautiful, functional tool from Apple that cannot stave off the effects of the Web indefinitely. Even with Viagra, you have to come down to life size eventually, after all.

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By John Blossom - posted at 3:05 PM
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Comments: 
John, another excellent piece of yours. Thank you. This is good stuff and I like to read more of this.

I also would like to share my own humble take on the iPad. I think this is a revolutionary tool, not so much for the positive aspects (and risks) which you have already outlined so well, but in particular because, like the original Mac, it opens up access to the Web and many of its features and communication abilities to a whole new huge group of people who have no interest or desire to have, own and learn a computer but who would love to be wired themselves.

My mom is a great example. It is over ten years that she would love to be more in touch with me and my brothers who are all connected and wired, but the cost and complexity of getting into having a computer, even a Mac, was just too much for her. Too much complexity to get what she really wanted.

The iPad revolutionizes all that, again, just like the Mac did in 1984. This is the great revolution the iPad carries with it, and though this revolution will be extended and augmented by other brands and similar products, I feel that Apple has once again opened a new huge marketplace that is going to extend very significantly the opportunities for content and media publishers online many times over.

from sunny Rome,

Robin
 
Robin,

Thanks so much your your comment. I agree that Apple deserves a great deal of credit for its willingness to rethink computer interfaces in ways that make content more accessible and usable. I recall seeing the Apple Lisa, the forerunner of the Mac, many years ago at Bell Laboratories. It was the very first personal computer with a graphic interface and a mouse that allowed people to point and click digital "objects."

Certainly the features of the iPhone now being expanded in the iPad to accommodate a larger interface are important incentives for people to use electronic content. I also think that multi-touch computing is just the beginning of a capability that will provide touch-aware content and services as we move into what I am terming "The Sensor Society," people who are using and manipulating content as an extension of their senses as never before. These are good and important developments.

Unfortunately for the content industry these developments will not enable them to hold on to older business models through whatever unique advantages iPad technology may offer. From a content industry perspective, that's the key concern from my standpoint. If a tablet is just a device to allow people to watch television in their lap, which is the type of behavior that many seem to focus on with iPad, then it will have achieved little.

What I am suggesting is that iPad will be revolutionary only if it results in new methods of information and experience delivery that really add new and unique value. The Mac was revolutionary in that it resulted in software that responded to the capabilities of a small graphic- and mouse-driven computer. I see in the iPad baby steps beyond what has already been accomplished via touch screens in the iPhone or Android.

I doubt that much of this will change because we can touch a screen on our lap. Touchable content simply doesn't do much yet today beyond what a mouse can do. The potential is there, but far from realized. By the time that content producers can develop those capabilities, it's likely that other platforms will begin to dominate also, just as the PC came in and overwhelmed the Mac with its cross-vendor approach to software development. Macs still do it better overall in terms of the experience, but the market share battle was won by Microsoft years so. Being revolutionary is great, but it doesn't mean that you'll wind up being the winner.
 
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