Archive for March, 2010
Everyone has been talking about “convergence” for such a long time that it isn’t sexy anymore.
Our original company tag line: ‘creative solutions for converging technologies‘ was changed 4 years ago to ‘Creative. Cutting edge’, but we could have probably kept the old tagline because it is only now that we are truly seeing convergence. And the single biggest catalyst for convergence will be the iPad, and it will happen in the year of the Tiger (i.e. 2010 plus a little bit extra!).
If successful, the iPad will be the catalyst for a tipping point in convergence. And the iPad will be successful. The key reasons for this are outlined in this article.
The Size-Convenience Paradox
The Size-Convenience Paradox is that “The biggest mobile device screens are too small. The smallest notebook screens are too big” (and too heavy to carry around in handbags).
The one thing I am told about my 13″ Vaio is ‘oh the keyboard is small’ but actually it isn’t. Each key only needs to be the size of a finger tip, and the only reason that keyboards are the size they are on laptops is because the screen was modelled on the size of a TV screen and the keyboard just filled up the space below it. But even small keyboards are one of the key reasons that notebooks have to be so big. They need screens and keyboards.
But think for a moment. What do you need keyboards for? We don’t spend large amounts of time typing anymore. Generation Y and below communicate differently, and the times when we sit down and type are the times when we are in front of our PCs at home or at work. It takes a knowledge of new and changing behaviour to get things right.
The Size-Convenience Paradox is a paradox because people want bigger screens because content is easier to consume (as there is more space for it), and it is also what we are used to as the web has traditionally been viewed though a PC sized screen. The problem is that carrying a PC sized screen in your handbag is annoying.
The iPad, and maybe Sony’s new line of really small laptops have got it right, but of these the iPad will succeed because it is designed from the mobile device up not the laptop down, and the simplicity that results will win it for Apple.
Technology is not exciting
The most common mistake that everyone makes is thinking about technology. WAP is not exciting. Applications ‘running apps in the background’ are not exciting. Flash 10 is not exciting… Actually scratch that (before our CTO rings me up and starts getting angry!). These things are exciting, but not to the vast majority of people, the unheard majority of people who buy devices and consume media.
What will be successful is what this unheard majority want. Not what the techies want. And that has nothing to do with technology and everything to do with design and usability.
You will see the techy commentators bashing the iPad, but they have missed the point. They are comparing it to the iPhone or laptop. But the iPad is neither. It is a new device. The converged device.
But speed is
One piece of technology that is important is speed (for the vast majority the key here is taking away the annoyance of waiting). The iPad is fast in terms of processing, but more importantly the trend is for wireless networks to get much faster. I know it doesn’t seem like that on the west and east coasts of the USA, but elsewhere in the world, and increasingly in the USA, the carriers are investing in technologies like LTE / WIMAX / 4G (whatever the technology is, the main point is that it will deliver faster than 3G speeds).
What this means is that the iPad and similar devices will be used for face to face communications. Video calls will finally happen, (driven by companies like Skype). I don’t think that 2010 is the year that video calls become available to the masses, but as I said earlier, it is the year of the tipping point, and by the time the mass market has the device, the carriers will have fast enough networks to handle video. This will all happen in 2 years, so look forward to 2012 for mass market video calls.
Value & Design
Cost is a pretty big factor, but the key factor is value. I value my iPhone. I didn’t really value my Nokia N95. The main reason for this is not that the iPhone was expensive but because of the device design. Handset manufacturers are catching on and the design guys are (finally) winning out over the engineers, but its only recently that manufacturers like HTC are starting to follow suit and creating devices that look (and more importantly feel) valuable – Google’s Nexus 1 is a good example.
The most successful phone ever was the Motorola V3 because it was thin metallic and felt good in your hand and pocket. And it came in pink. The funny thing is that only now are companies realising that making pink (and other coloured) laptops will do more for sales than any amount of on board RAM. I still scratch my head about why it has taken so long to realise this –I think that it is because the people creating these things are engineers rather than designers.
I do really value my Vaio, but it cost just over US$2,000. The iPad is about half the cost or less, and although the cost of notebooks is coming down, I don’t see it ever really competing on price, mainly because they don’t have a nice ready-made ongoing revenue stream model like Apple do, so the laptops will never be able to beat the iPad on cost.
Ease of Payment
One of the key things that Apple has that is very important is an easy way to make money both for themselves and for developers. This is not the case for other app stores (with the possible exception of Android), and will ensure that all the content comes to their platform first. Adding books and video in a way that people want to consume them (the iPod screen is still just too small for long video, but the iPad isn’t) will mean more revenue for everyone (publishers and Apple). The behaviour here will be a book / magazine like veneer which is read in the same way as the traditional media, with cool social media type stuff built into the background.
Apples 30% cut is still way too much. Reducing it to between 5% and 10% is an opportunity for Apple to become the de-facto payment for retailers and content providers who won’t accept 30% and will bypass Apple’s payment solution. We have seen many of our clients do this, so maybe there is a 2 tiered structure there somewhere. Apple’s big head start here was because of iTunes and the millions of people who already use it to pay for music, so the billing relationship is there.
The guys to blame here are the mobile carriers, why they didn’t learn from DoCoMo (who take a much smaller percentage of the cost of content) is beyond me and indicative of old company thinking. Sadly Apple, although improved on the 40% to 60% that the carriers take, are still taking too much. Amazon (with Kindle) are even bigger culprits, and although they are pioneers, they will be one of the losers in the convergence playground.
The iPad is the convergent device. Not a laptop, and not an iPhone or iPod. It is a new device that everyone will have that will eventually replace both. It is also the catalyst that will be the tipping point for other convergent devices. It is the perfect solution to the Size-Convenience paradox. Designed and priced well will mean that it will sell well, and it may take more than the year of the Tiger to get it into everyone’s hands, but it will happen.
Other companies will follow Apple’s lead, as we have seen with the iPhone and until we integrate our brains with organic computing, the converged device will be the standard communication device for the short to medium term future. This will really happen in 2011 and 2012, but companies will need to give it some serious thought now if they plan to take full advantage.
- Publishers, who have an opportunity to replicate their traditional revenue models
- Skype / other video calling companies for whom the iPad is a perfect interface
- Airlines / trains, who will see the number of people using these devices in-flight increase significantly, and should be able to provide services bundled in with connectivity
- Any wireless providers – who will see a lot more demand especially before the next generation of wireless networks are fully up and running
- Location based services companies / social networks as more people access while on the move, and with the larger screen will be able to do more
- Mums and dads who want to keep their kids happy in the back of the car, and therefore educational companies who provide content that mums and dads will let their kids interact with.
- Kindle / Nook / any other reader will suffer in the same way that other MP3 players did when the iPod came out
- Laptop manufacturers, especially those playing in the small laptop space. They will struggle to compete on both price and quality / design of device
- Wireless carriers whose networks will start to really strain under the weight of the increased traffic
- I don’t see a threat to Apple themselves as I don’t think that the iPad will cannibalise iPod touch or iPhone sales
- Flash or anyone else who Apple doesn’t integrate with the device
- Pulp and paper companies as having a nice reader will finally start to replace the printed version