Couldn't resist!

Back-from-the-blogging-dead for just 1 post!

For the last few weeks, it's been full-on with the rumour mill on the Apple iTablet/iSlate or whatever. Let's just call it the iTablet here though I doubt (hope) tablet or slate will be in the name.

There have been some really intelligent things written by the usual commenters (oh, if I could write and think like Gruber!), and there's been the usual useless prophesying of doom, me-too, etc.

What the naysayers still haven't realised after years of being proven wrong is that Apple hasn't just been lucky, it's been incredibly smart for years and years. The only area where Apple has arguably not delivered a success in the Jobs-era is the AppleTV - and this is the one thing that Steve Jobs described as a hobby around the time it was released. If you haven't figured out this guy is smart yet, it's really about time you stopped "analysing"? I've interviewed with him before, and believe me he knows what he wants and he knows the people who can make it happen (I DIDN'T get the job!)

Has Apple's success happened overnight with just a few clever ideas? No. Look at the small pieces that have to be put together one component at a time to deliver the whole experience. It is this attention to detail in terms of the overall experience that takes each individual product above its competitors and keeps it out ahead. At the same time, Apple would rather leave out a feature than do it badly or have it create other problems that they KNOW, but the "analysts" don't. Does it now look like a stupid move to have a 2G iPhone as the first model?

So, with this in mind, we enter this week in the expectation that Apple will completely re-invent another area of our lives that we didn't even know needed re-inventing before the rumours started. Just as Apple killed the successful iPod mini with the iPod nano, I expect it this week to announce the product that begins the long-term decline of the laptop. Of course, many people will still need a laptop and/or prefer one (I'm likely to be a long term user for many reasons, but I would probably be considered unusual), and these people will generally be the ones that pour scorn on the new direction. Other people will say it wasn't Apple that did it, but that Apple is just responding to the netbook companies that started it.

But, Apple will do it in Apple's way - using user interface paradigms that initially we'll be unsure about, but will begin to appreciate as we see it demoed, as we see it being used, and as we begin to use it ourselves. Irrespective of the absolute form factor and other features, it will be the way we interact with it that will make THIS product introduction be the defining way such devices will work in the long term. Think Mac GUI and mouse, iPod clickwheel and iPhone multi-touch here - defining moments in the consumer electronics industry.

Could Apple get it wrong? Possibly. Newton 1.0 wasn't ready for primetime. Newton 2.0 was, but never got over the reputation of 1.0. Jobs is smarter than the people around Apple at that time. He has been waiting until it all comes together to do it right (iPod required small disks, firewire and clickwheel to do something revolutionary; iPhone required touch, SSD, high power tiny chips).

Apple have been sweating these details for years. I've read a rumour that the iPhone came out of the tablet development, and it's not an unlikely scenario. Multi-touch was not sufficiently developed or even understood to be used in something revolutionary beyond a small device with limited gestures. As MacWorld contributor Dan Moren wrote, this device will succeed or fail based on whether people BELIEVE they can INPUT stuff into it quickly and accurately - whatever stuff they want, but especially the stuff they are used to putting in their laptops via a keyboard. Any additional inputs (e.g. dictation, recording) will be bonuses. But the basics are a REQUIREMENT.

If Apple CAN get the input side right (early reactions will no doubt include the same people who condemned touch on the iPhone), then it has several advantages over the situation in mobile when it jumped in. Here, they were a late entrant into a theoretically competitive and maturing market - a market that was supposed to swallow up the iPod line as this functionality became just an extra app built into a mobile. Also, there was the gateway managed by restrictive telcos to negotiate - what was the most Apple could put in the device that would still allow them to partner with one or more major telcos? The iPhone remains below it's true potential today for these reasons (e.g. VoIP on 3G), but has blown a big hole in many of the restrictive models that were around before - something rarely appreciated by Apple's critics, but which has benefitted all handset makers and consumers.

In this case, we have an immature market, with no gatekeepers - and that is even giving some credit to the tablets already out there that are really nothing more than windows pc's with a stylus. With the iPhone, there were NO apps when it was released, and the best we could get were a limited number of web apps. Apple will release the tablet with a rich set of applications already there to demonstrate it's usefulness, and the existing iPhone developers will jump on ship quickly making use of possibly the best application delivery platform ever available (I do not see this as just a big iPhone - that would fail, but I do see many of the developments being carried over to the iTablet. I guarantee, there will be no shortage of apps very quickly - perhaps even day 1. Let's just hope that the good ones rise to the surface quickly. I believe the key in widespread success will be how quickly the ecosystem of hardware add-ons and software develops to produce compelling uses that were never before possible with either a laptop or a tiny phone. That will create the barriers to entry allowing Apple to profit from the device over the long term.

That brings us to two other key success factors. The first is how much Apple can open up this device when compared with the iPhone. I've no doubt this will be an openly multi-tasking device (not just limited to certain Apple-designed apps) - but how this is done without compromising performance, reliability and security will be key. I also think Apple will have to allow alternative application delivery methods here - at least in the medium term. Central control has served it (and its customers) well for the iPhone. But this model will be too restrictive in the longer term for a device like this, constrain new business models and entrants into the ecosystem. I don't believe Windows will develop fast enough to offer good alternatives, but Google can take either ChromeOS or Android into this area quite quickly and give a more open proposition if Apple doesn't do it fast on the back of release.

The final issue comes down to cost. Apple is known as the high cost company - something I feel is grossly misrepresented by many in the media and the anti-apple brigade who can't understand basic specification sheets or look at cost of ownership - but let's face it, plenty of companies will come up with something cheaper that purports to do a similar thing. Can Apple deliver this best-of gadget at a compelling price - much as it has with the iPhone - by both quantity production and perhaps viewing the device as a gateway to content consumption and application purchase for which it's getting a cut?

If these things are on Apple's side, then this device becomes the main device we carry around with us as we work, play, travel, etc. THE primary device on which content is consumed, communicated and collaborated (but less so, created). Sure, we'll still need our phones - and for many this may still do - but how often will most people need their laptop? It's not even going to be one device per family - this will be intended to be a one-per-family-member product much as the iPod has become - with you in the kitchen/breakfast table, a companion to watching tv, on the train, in meetings, at conferences or lectures, as we go about most aspects of our jobs and our leisure activities. There will be a steady shift back towards the home computer/desktop computer as the place it all comes together and for heavy lifting (e.g. photo/video management) - as well as (or maybe just) the cloud for the actual storage of our data.

The notebooks have tried to destroy the laptop market by cheapness. Can Apple destroy it (an area it makes much of its profit) by building something BETTER than a laptop for most of what we do? I personally think it can and I think Steve Jobs is on a mission to do this (remember the comment "the PC wars are over. Done. Microsoft won a long time ago"? Is that not a motivator for him to change the game?). The mainstream media have set this as a (perhaps an unfairly) high hurdle, but Wednesday's announcement will probably be judged on whether the new product meets this challenge (while being criticised for attempting to take the challenge on and not delivering in every single possible area!). It is a measure of Apple's achievements that this is even being talked about so enthusiastically BEFORE a product is released - where's the excitement from Dell, HP, Lenovo, etc who should equally be capable of this sort of development, let alone the Redmond machine which will once again be left looking foolish and void of ideas. It will be a true measure of greatness if Apple can deliver something that yet again inspires a new round of innovation.

What an exciting week ahead!

Tags: Apple, iTablet, iSlate, iPhone, Microsoft

New Google Public Transport Info Sucks!

Got my iPhone 2.2 software loaded and thought I'd check out some of the new features.

I haven't been able to get Google Street View to work yet for London, but I did come to try the new travel directions feature. Unfortunately the results are embarrassing - for Google, and I think this needs a lot more work on it.

Here's what I got for a simple route from Piccadilly in London to Battersea SW11. It's a route of about 4.5km or just under 3 miles, walkable in about 55 minutes. A single London bus (19) will do the journey in (hopefully) about half that time.

Google's instructions were as follows:
1. Walk 1.1km to Hyde Park corner (fair enough).
2. Take the 702 bus towards Ascot but getting off at Victoria station - 1 stop on. (For my American friends this journey is like getting on a greyhound bus in Manhattan and going 5 blocks down 5th Avenue).
3. Get the the 025 bus towards Eastbourne (a town on the south coast), but getting off at Gatwick airport.. Note, no suggestion about the much faster train service from exactly the same place also to Eastbourne and also stopping at Gatwick airport. Gatwick airport is about 25-30 miles from central London.
4. Now take the airport bus from South terminal to north terminal!.
5. Get a bus EB4 from Gatwick to Fulham Broadway back in Central London.
6. Finally walk 2.4km to SW11 (total walk of 3.5km).

This public transport version which saves just 1km of walking, takes 3 hours and 15 minutes and appears to travel at least 60 miles! There is no cost given, but I suspect it is substantial.

Google claims (on it's website) to use the travelinesoutheast.org.uk data. However, using this service throws up several London bus routes (though not the best ones). It would seem that Google has ignored 98% of the available alternatives (including all London buses, and all trains).

A year ago, we used a government service to find the best route to drive to Hastings on the south coast, and it threw up a route going via Ashford and over 90 miles in distance. The direct route (which google itself gave) was around 55 miles. The government site then added further futility by suggesting speed should be no more than 55mph to limit CO2 emissions! Sure, your CO2 emissions might be 10% less than they would have been, but their stupid route would have increased it by 50% over what it should have been anyway!

It seems we've still got a way to go in making these services useful. I'd hate to see what a tourist would have done with Google's information, and I'm glad I use my bike to get around London.

Tags: Google, iPhone, Transport, London

O2 and iPhone Fair Usage Policy

A conversation with an O2 store manager, fresh back from iPhone training:

Me: "So, what IS the fair usage policy for the 'unlimited data plan' going to be on the iPhone accounts?"
O2: "40Gigabytes"

Me: "Really, that actually seems quite high to me and not what I had read. I had even heard that it might be as low as 200MB. Are you sure?"
O2: "Oh, no, sorry, the 40GB is for our new home broadband package. But it's very high for the iPhone, definitely."

Me: "Er, so, what actually is it?"
O2: "Um, er..." rummaging around various papers, and the website (which said nothing other than "fair usage policy applies"). "...I'll call a guy who's sure to know".

O2 guy on phone with other O2 guy: "A customer here wants to know the iPhone fair usage policy amounts". pause and more pause. Quite clearly the guy who's sure to know doesn't actually know.

Slightly embarassed O2 guy to me: "He thinks it's either 70MB or 200MB. Either way, that's a huge amount of data on a phone."

Me: "Really, as low as 70MB? That doesn't seem to be too much for what is described as unlimited data".

O2: "For email, it's all text and there's not much else you'd get that is large".
Me: ??? (too gobsmacked to contradict him).

So, I leave non-the-wiser, except that I have confirmed that o2 retail is just as poor as I expected. The only thing the store manager (post training, remember) knew that I didn't is that the sales opening time is not 6pm, but 6.02pm. (geddit?). He was very proud of that. Oh, he also knew (or thought) they would have 60,000 on sale in the 400 odd o2 stores, and that they might get delivery that day (Friday) for the week ahead - (hope their security is tight).

Nevertheless after 10 years with Orange and Nokia, I have my PAC number and will be in line on Friday (mercifully at an Apple store), with no qualms whatsoever about switching. While I was impressed with the last Orange rep I spoke to, I have had a very poor year with them at every level with a completely defective handset (Nokia N80) that was essentially unusable for the things it promised, and poorer than any recent phone I've had in terms of basic interface and even for the job of making calls and sending texts. Despite my 3G plan, I have almost never used the web browser, and I would not countenance emailing with it. The Wi-Fi feature was so badly implemented as to be worse than not having it as it could not be disabled. I have a list of fundamental problems with the phone, some of which should have been addressed by firmware which never came. While the N95 successor may have fixed some of these shortcomings, I have generally heard negative things from most recent real users of these devices after a short time of actually using them. (An interface requiring 16 different button presses before you start typing the body of an sms is completely ludicrous.)

I do wish Orange (a lesser company than they were imho), or Vodafone, had won the rights, but I have known from the minute I saw the announcement that I would get one (did you imagine anything else?). Having briefly played with an unlocked one, that decision was vindicated.

While clearly a cost of around £900 over 18 months is a lot, it is not much different than the plan I had with Orange including the upgrade cost for the N80, which did not include wi-fi hot spot access and had severe caps on data and SMS. I know that I will use the features of this device, which I would not (and could not) on the N80. The equally expensive N95 would not have rectified most of the N80's shortcomings in my mind.

However, somebody please at O2, sort out what "unlimited data plan" and "fair usage policy applies" really means. And, the latest wording on the website "All usage must be for your private, personal and non-commercial purposes" does not inspire confidence in that regards. Nor does "(not) use your SIM Card or iPhone to allow the continuous streaming of any audio / video content, enable P2P or file sharing or use them in such a way that adversely impacts the service to other O2 customers". C'mon, are you serious? In reality, any usage of a shared service like a cell causes degradation to the others on that cell.

While I do not expect to use the iPhone as a replacement broadband + computer device, I don't see that "unlimited" and "70MB" go together, nor restrictions about zero business/commercial use. These clauses are both stupid and unenforceable.

I am, perhaps, trusting too much in the regulator to intervene if such ridiculous limitations are in reality applied. Nevertheless, I will be in-line somewhere off Regent Street starting Friday afternoon. Hope to see you there!

Tags: iPhone, Apple, O2, Fair Usage Policy,
Unlimited data

iPhone Sales Numbers - BEFORE Q3 results

I'm writing this BEFORE Apple announces today's earnings, but AFTER the crazy market/media reaction to news that AT&T "only" activated 146,000 iPhones by 30th June.

What IS amazing is that in 30 hours, from 6pm Friday to midnight Saturday, 146,000 iPhones were purchased, taken home, unboxed, plugged into a computer, and then successfully activated. Had anyone suggested such numbers even a day or two before the iPhone was released, they would have been considered an optimist. Now, some are comparing the 146,000 number to some mythical 1million figure some analysts ended up speculating on.

As far as I can recall, I have seen few analyst projections of 1million iPhones and certainly not even in the few day initial period. I have seen numbers as low as 50,000 (originally from Shawn Wu of American Technology Research, and general Apple bull) to perhaps 350,000 from Goldman Sachs. Some of those numbers were then doubled AFTER the weekend (to 700,000 in the case of Goldman Sachs).

But remember here, the weekend includes a Sunday - only the second full shopping day the iPhone was on sale. How many iPhones could not be activated at first (certainly a few by some rumours)? How many iPhones did not get activated by the Saturday evening because the person hadn't had time, was keeping the iPhone as a present, or whatever other excuse? How many iPhones were ordered from the online stores on those days for later delivery?

And, what is success anyway? Is failure just the inability to hit whatever highest number some analyst (perhaps a naysayer anyway) set just to create a headline?

At 146,000 iPhones sold in 30 hours, Apple and AT&T created a revenue stream of $292m to share between them over 24 months.

Today, Apple will report its own financial figures for the last quarter (its financial close period which began BEFORE the iPhone was released is the fundamental reason it has not been legally able to comment on sales before this time). Apple may also (like AT&T) choose to report just the 30 hour period (or perhaps 33 hour period in its case being based on the West Coast). But, even in this period it will include over the counter sales - not activations. It may also account for sales via the AT&T store differently - as these essentially are sales as a wholesaler of the product.

My wild guess at this point is that Apple will report sales of around 225,000 or more for the 30 hour period. And, if they are to report sales for the first week, or first month (we're just 2 days away from that point), we will genuinely see that they will have between 400,000/700,000 and 500,000/1million iPhones in people's hands today (firstweektarget/firstmonth target). I suspect Apple's control of PR extends to its agreement with AT&T and allows it to publish the first important headline numbers for sales.

Sales of more than 500,000 iPhones will be a 2 year revenue stream of at least $1billion between Apple and AT&T (they are currently the sole retailers - so no other retailers to split with). Not bad for one month!

Contrast this with Zune and XBox360.

Assuming Zune sales so far of 1.2m, and even assuming full retail price of $249, this is $298m in revenue - almost exactly equal to the revenue from the 146,000 AT&T activations. Only this has taken Microsoft not 30 hours, but more than 8 months. It is also a widely held belief that Microsoft has not SOLD 1.2m Zunes, but shipped them. Many remain unsold on shelves. And, there has also been some significant discounting from the $249 price, to say nothing of the retail margin.

XBox360 has been with us for about 20 months. 11.6m units shipped (but not necessarily sold). Assume price of $299 again, and we reach $3.468b. Then take the $1.2bn cost of repairs announced recently out of that - and we have a number approaching $2bn - for 20 months!

I know which company I would be betting on today.

We will see crazy headlines today, and we will see unpredictable market reaction whatever the numbers. But what is already clear is that Apple has a phenomenal hit on its hands. Reviews have been overwhelmingly outstanding. Sales have been very robust indeed - whatever these sky high forecasts make you think the boundary of success is. Apple is only to be praised for seemingly being able to just about keep up with demand (something in the past it has not been good at, with fair criticism from the same quarters who now say any unsold stock is a failure!) Any commentary on today's numbers that doesn't recognised the success for what it is - both in technical and business terms is very delusional (or in the pockets of some of Apple's and AT&T's competitors).

I'll be writing on the financial numbers after they come out. I'll be paying particular attention to what the sales of iPods and Macs have been in the last 12 months. But, if the market reaction is negative today, look at this as your best time to pick up Apple stock for some time.

Disclosure: the author holds 600 shares of Apple, and last time he bought shares was 11th July 2006 - a little over 12 months ago when they were as low as $54. I hope you followed my advice then!.

Tags: Apple, iPhone, Microsoft, Sales, AT&T

iPhone in Europe

Just one comment on the plentiful rumours each day about exactly which carrier is going to get the exclusive rights for iPhone in Europe (one day it's Vodafone, then it's T-Mobile, maybe in Germany, maybe not), then it's O2 in UK, Orange in France....

Most of the rumours say it's going to be the same 2.5g device as in the US. But I'm going out on a limb here and say that it will NOT be that. As I understand it, only Orange supports Edge in Europe. Other carriers have either slower 2G (GPRS) data networks, or 3G networks.

Given the lack of availability of wi-fi hotspots (at least for free) in much of Europe, the importance of 3G (or at least fast networks) is going to be MORE important in Europe.

My prediction is that Apple will release the 3G iPhone in Europe. At the very least, I do not believe they will release a slower one than the Edge version in the US. In making this prediction, I am betting against the supposedly more informaed Times, FT etc all reporting on this matter so certainly.

On a similar theme, while Apple appears to have agreed a 2 year exclusive with AT&T in the US, I do NOT believe they will agree such an exclusive in European markets. This is because they are more fragmented than the US (eg. typically 5 providers in many markets often with similar shares). Sure, there may be country exclusives. But I don't believe they'll be for much longer than a supply shortage would exist.

The mistake most media is making is that the deal and product that is in the US is the deal and product that will be made here. I don't think it is right to make that assumption. Sure, there will be similarities and the AT&T deal gives us a number of pointers. But no more.

What is important in all this is that Apple holds their ground and has driven the service providers so that they do not cripple the device. I'll be posting soon on why the Nokia N80 I got last year is the most disappointing phone I've had and how the UI on the iPhone trounces it.

Tags: Apple, iPhone, Europe, Orange, Vodafone, O2, T-Mobile

The definitive iPhone review?

Trust AnandTech and Anand Lai Shimpi himself to write what is probably the definitive iPhone review - all 20 pages of it.

What I like about this site is that they do a thorough job of every test they do. Second, they have no particular agenda other than doing a great job. This is not a pro-Apple site per se (though Anand did I believe switch to Mac last year).

If you thought the pro-Apple journalists such as Walt Mossberg and David Pogue are not independent enough, you should certainly read this one.

On a related note, I think this article at Blackfriars marketing gives great insight into Apple's business strategy. Admittedly unlike the iPod (which Apple didn't have to bring to market), they were always going to have to build a phone as a defensive measure. What is so remarkable is that they've entered this market and turned it inside out. They say the best form of defense is attack, and this product will define the starting point of a long-overdue period of innovation in both products and services for the mobile industry.

Tags: Apple, iPhone, Anandtech