iOS

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The Hybrid Tablet Temptation

 

In no small part, the iPad’s success comes from its uncompromising Do Less To Do More philosophy. Now a reasonably mature product, can the iPad expand its uses without falling into the hybrid PC/tablet trap?

When the iPad came out, almost four years ago, it was immediately misunderstood by industry insiders – and joyously embraced by normal humans. Just Google iPad naysayer for a few nuggets of iPad negativism. Even Google’s CEO, Eric Schmidt, couldn’t avoid the derivative trap: He saw the new object as a mere evolution of an existing one and shrugged off the iPad as a bigger phone. Schmidt should have known better, he had been an Apple director in the days when Jobs believed the two companies were “natural allies”.

I was no wiser. I got my first iPad on launch day and was immediately disappointed. My new tablet wouldn’t let me do the what I did on my MacBook Air – or my tiny EeePC running Windows Xp (not Vista!). For example, writing a Monday Note on an iPad was a practical impossibility – and still is.

I fully accept the personal nature of this view and, further, I don’t buy the media consumption vs. productivity dichotomy Microsoft and its shills (Gartner et al.) tried to foist on us. If by productivity we mean work, work product, earning one’s living, tablets in general and the iPad in particular have more than made the case for their being productivity tools as well as education and entertainment devices.

Still, preparing a mixed media document, even a moderately complex one, irresistibly throws most users back to a conventional PC or laptop. With multiple windows and folders, the PC lets us accumulate text, web pages, spreadsheets and graphics to be distilled, cut and pasted into the intended document.

Microsoft now comes to the rescue. Their hybrid Surface PC/Tablet lets you “consume” media, play games in purely tablet mode – and switch to the comfortable laptop facilities offered by Windows 8. The iPad constricts you to ersatz folders, preventing you to put your document’s building blocks in one place? No problem, the Surface device features a conventional desktop User Interface, familiar folders, comfy Office apps as well as a “modern” tile-based Touch UI. The best of both worlds, skillfully promoted in TV ads promising work and fun rolled into one device.

What’s not to like?

John Kirk, a self-described “recovering attorney”, whose tightly argued and fun columns are always worth reading, has answers. In a post on Tablets Metaphysics – unfortunately behind a paywall – he focuses on the Aristotelian differences between tablets and laptops. Having paid my due$$ to the Techpinions site, I will quote Kirk’s summation [emphasis mine]:

Touch is ACCIDENTAL to a Notebook computer. It’s plastic surgery. It may enhance the usefulness of a Notebook but it doesn’t change the essence of what a Notebook computer is. A keyboard is ACCIDENTAL to a Tablet. It’s plastic surgery. It may enhance the usefulness of a Tablet, but it doesn’t change the essence of what a Tablet is. Further — and this is key — a touch input metaphor and a pixel input metaphor must be wholly different and wholly incompatible with one another. It’s not just that they do not comfortably co-exist within one form factor. It’s also that they do not comfortably co-exist within our minds eye.

In plain words, it’s no accident that tablets and notebooks are distinctly different from one another. On the contrary, their differences — their incompatibilities — are the essence of what makes them what they are.

Microsoft, deeply set in the culture of backwards compatibility that served it so well for so long did the usual thing, it added a tablet layer on top of Windows 7. The result didn’t take the market by storm and appears to have caused the exit of Steve Sinofsky, the Windows czar now happily ensconced at Harvard Business School and a Board Partner with the Andreessen Horowitz venture firm. Many think the $900M Surface RT write-off also contributed to Ballmer’s August 2013 resignation.

Now equipped with hindsight, Apple’s decision to stick to a “pure” tablet looks more inspired than lucky. If we remember that a tablet project preceded the iPhone, only to be set aside for a while, Apple’s “stubborn minimalism”, its refusal to hybridize the iPad might be seen as the result of long experimentation – with more than a dash of Steve Jobs (and Scott Forstall) inflexibility.

Apple’s bet can be summed up thus: MacBooks and iPads have their respective best use cases, they both reap high customer satisfaction scores. Why ruin a good game?

Critics might add: Why sell one device when we can sell two? Apple would rather “force” us to buy two devices in order to maximize revenue. On this, Tim Cook often reminds Wall Street of Apple’s preference for self-cannibalization, for letting its new and less expensive products displace existing ones. Indeed, the iPad keeps cannibalizing laptops, PCs and Macs alike.

All this leaves one question unanswered: Is that it? Will the iPad fundamentals stay the way they have been from day one? Are we going to be thrown back to our notebooks when composing the moderately complex mixed-media documents I earlier referred to? Or will the iPad hardware/software combination become more adept at such uses?

To start, we can eliminate a mixed-mode iOS/Mac device. Flip a switch, it’s an iPad, flip it again, add a keyboard/touchpad and you have a Mac. No contraption allowed. We know where to turn to for that.

Next, a new iOS version allows multiple windows to appear on the iPad screen; folders are no longer separately attached to each app as they are today but lets us store documents from multiple apps in one place. Add a blinking cursor for text and you have… a Mac, or something too close to a Mac but still different. Precisely the reason why that won’t work.

(This might pose the question of an A7 or A8 processor replacing the Intel chip inside a MacBook Air. It can be done – a “mere matter of software” – but how much would it cut from the manufacturing cost? $30 to $50 perhaps. Nice but not game-changing, a question for another Monday Note.)

More modest, evolutionary changes might still be welcome. Earlier this year, Counternotions proposed a slotted clipboard as An interim solution for iOS ‘multitasking‘:

[…] until Apple has a more general solution to multitasking and inter-app navigation, the four-slot clipboard with a visible UI should be announced at WWDC. I believe it would buy Ive another year for a more comprehensive architectural solution, as he’ll likely need it.

This year’s WWDC came and went with the strongest iOS update so far, but no general nor interim solution to the multitasking and inter-app navigation discussed in the post. (Besides  the Counternotions blog, this erudite and enigmatic author also edits counternotions.tumblr.com and can be followed on Twitter as @Kontra.)

A version of the above suggestion could be conceptualized as a floating dropbox to be invoked when needed, hovering above the document worked on. This would not require the recreation of a PC-like windows and desktop UI. Needed components could be extracted from the floating store, dragged and dropped on the work in process.

We’ll have to wait and see if and how Apple evolves the iPad without falling into the hybrid trap.

On even more speculative ground, a recent iPad Air intro video offered a quick glimpse of the Pencil stylus by Fifty-Three, the creators of the well-regarded Paper iPad app. So far, styli haven’t done well on the iPad. Apple only stocks children-oriented devices from Disney and Marvel. Nothing else, in spite of the abundance of such devices offered on Amazon. Perhaps we’ll someday see Apple grant Bill Gates his wish, as recounted by Jobs’ biographer Walter Isaacson:

“I’ve been predicting a tablet with a stylus for many years,” he told me. “I will eventually turn out to be right or be dead.”

Someday, we might see an iPad, larger or not, Pro or not, featuring a screen with more degrees of pressure sensitivity. After seeing David Hockney’s work on iPads at San Francisco’s de Young museum, my hopes are high.

JLG@mondaynote.com

@gassee

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Android vs. Apple. Market Share vs. Profit Share, Part 255

 

Conventional wisdom and badly reconstructed history can lead to seemingly comfortable but in reality fragile conclusions. Prepare to be confused. 

Ever since the Android platform emerged as the only real competitor to Apple’s iOS devices, we’ve been treated to a debate which I’ll oversimplify: If Apple makes all the money but Android gets all the volume, who will win? A cursory survey of tech journals and blogs would lead one to believe that the case is closed: Market Share trumps Profit Share. It always does.

So Apple should call it a day? I’m skeptical. Not about the conclusion — Market Share isn’t exactly a dark horse — but about the arguments that are trotted out. False memories of Apple’s past have become a template for its future. For example, a recent Wall Street Journal article ends thus [and, sorry, you need a subscription to see the entire article]:

“Unfortunately, Apple has seen this movie before. A generation ago, it also had a top product whose market share was undercut by cheap, inferior rivals. It hopes the iPhone’s story isn’t a sequel to the Mac’s.”

(I emailed the WSJ writer asking three simple, clarifying questions. No answer, but that’s standard practice, as witheringly described by Philip Elmer-DeWitt at the end of this post.)

I was there “a generation ago”. In 1981, when IBM introduced the IBM PC, I was starting Apple France. Big Blue had made startling changes to its old ways, boldly calling its new machine The Personal Computer (we thought the “The” was ours). In an even bolder move, IBM loosened its tie and its dress code, and tried (successfully) to speak to the “common man” by using a Charlie Chaplin imitator as a mascot:

An interesting choice, particularly when juxtaposed with the real Chaplin’s cine-commentary on “labor-saving devices”:

The original PC from IBM’s Boca Raton group was a faithful homage to the Apple ][, right down to the cassette interface. But it wasn’t a cheap imitation. There was one important difference:  Where the Apple ][ used a 8-bit 6502 processor, IBM splurged on the much-more-powerful 16-bit Intel chip.

Almost overnight, the pages of InfoWorld, previously replete with salivating reviews of Apple products, were filled with IBM PC articles. The new machine got a major boost with the launch of Lotus 1-2-3, a multi-function spreadsheet that became the gold standard for office applications, especially on desktops that sported hard disks and large color screens. Against the Apple ][, the IBM PC was a superior product — and deftly marketed.

For the next few years, the Apple ][ family stumbled. The Apple ///, beset by early hardware failures, didn’t answer the 16-bit question. It wasn’t the modernization of the Apple ][ that the company had promised. The Apple II GS was even worse, not compatible enough with the Apple ][ and not powerful enough to attract developers, particularly Bill Gates who saw no potential for Microsoft applications.

That brings us to 1984. The Macintosh changed the game, right?

Hardly. At its coming out party, the Mac was two years behind schedule. I recall the “Mac’s Last Slip” jibes at company meetings. No one would deny the obvious potential, the elegance, the innovative user interface, the clean square pixels on the bit-mapped screen, the fonts, the LaserWriter connection… But the Mac didn’t support external hard drives until 1986, and it would be another year before internal disks, additional modularity, and a great Trinitron color monitor were added.

By that time, IBM had had the market to itself for half a decade, and its PC creation had morphed into the Wintel clone industry.

Contrary to the revisionist WSJ story, the “generation ago” Mac never had a market share to undercut. Apple’s flagship product — innovative, elegant, a generation ahead – was a dreamer’s machine. Down-to-earth market wisdom said the Mac was perfect for Stanford undergrads, but not serious enough for real business use. The common view was application developers wouldn’t be able to afford the investment in time and hardware. Starved of competitive software, the Macintosh was doomed to irrelevance and, ultimately, failure.

It almost happened, especially after Apple’s desperate attempt to prop up platform share numbers by licensing Mac clones, a move that resulted in a brutal drop in Apple’s margins. Market share vs. Profit Share…

The Mac was saved by Gil Amelio’s unintentionally self-sacrificing decision to hand the Apple reins back to Steve Jobs. What followed was the most amazing turnaround our industry has ever seen, and it started with two controversial moves: Jobs rescinded the Mac OS license, and he made a deal with the Microsoft Devil. He convinced Gates’ company to “invest” $150M in non-voting Apple shares and develop new Mac versions of the Explorer browser and Office apps (although, in reality, the agreement was part of a settlement of an older IP dispute).

We know the rest of the story, including a meme-adverse fact: For close to seven years, the Mac has consistently gained market share at the expense of PC clones.

Since the advent of another flagship product, the iPhone this time, the riches-to-rags Mac meme has led to predictions of a similar fate: Death by drowning in a sea of “cheap” Android clones. Apple’s high price ($650 per iPhone on average) gives too much low-end room for competitors. The price will be undercut, there will be a decline in unit share that, in turn, will lead to lower profits, lower developer interest, lower ability to invest in future products. The road to irrelevance is paved with high margins and low market share.

Never mind two differences. First, the iPhone never lacked apps, 750,000 of them at last count. And never mind that it is immensely profitable, that Apple is embarrassingly flush with more cash than all its high-tech colleagues combined. The pundits won’t accept evidence as an answer. Market Share will trump Profit Share. Why let facts cloud a good argument?

One is tempted to point to the race to the bottom that PC clone makers have experienced over the past decade. HP enjoys the largest Market Share of all PC makers, but it also “enjoys” less than 4% operating profit for its efforts. Meanwhile, Apple’s margin is in the 25% range for its Mac line. That may not be as enjoyable as the 60% margin for the iPhone, but it’s a solid business, particularly when you consider that the clone makers, HP and Dell foremost, are angling to get out of the business altogether. (See an earlier MN: Post-PC: Wall Street Likes the View.)

Returning to the iOS vs Android debate, I will state an opinion – not to be confused with a prediction, let alone The Truth: I think the vertical simplicity of Apple’s business will tilt the field in its favor as the complicated Android world devolves into anarchy. Apple vs Google isn’t Apple vs Microsoft/Intel/IBM.

Let’s back up a bit. Google’s 2005 acquisition of Android was a visionary move. (Some say Google’s vision was sharpened by Eric Schmidt’s presence on Apple’s Board as the company worked on the future iPhone. Jobs was furious about Google’s decision and summarily asked Schmidt to leave.) Android’s unprecedented growth — more than 50% share of the smartphone market in the US, and even more worldwide – is a testament to the “open” approach. Google gives away the Open Source Android OS; processors are another kind of “open”, custom-designed under ARM licenses open to all payers.

But Android is a “cushion shot”, it’s an indirect way for Google to make money. Android is a Trojan horse that infects smartphones so it can install services that collect the user data that feeds Google’s true business: advertising.

Now, Google faces several problems. Android’s openness leads to incompatibilities between devices, a problem for developers that didn’t happen under Microsoft’s rule in the PC era. Worse (for Google), the many diverging versions of Android (a.k.a. forks) — especially those created in China — carry no Google services. They harvest no data and so they bring no advertising revenue potential back to Google.

This is clearly a concern for Google, so much so that the company now offers “pure” Android smartphones by Samsung (for $650) and HTC (for $599) on its Google Play site.

On the other hand, Android 2013 is a mature, stable OS. It isn’t Windows ’95, which was nothing more than a shell bolted on top of DOS. While the Mac’s system software wasn’t fully developed when it first came out, many saw it as superior — or potentially superior — to Microsoft’s OS. Android is a tougher competitor than Windows was at the same age.

Then there is Google’s subsidiary Motorola Mobility and the relationship with Samsung, the most powerful Android handset maker. As discussed last week, Motorola’s stated intention is to push Android phone prices well below the $650 (unsubsidized) level. Is Samsung in a position to wag the Android dog? And if so, how will they react to Motorola’s moves?

Let’s not forget “the small matter of execution”, one that might prove more important than lofty “strategic” considerations. And, to further complicate predictions, we have the herd’s tendency to assume Company X will make all the mistakes while its competitors will play a perfect game.

Confused? Then I have accomplished one of my goals, to show how unhelpful the old bromides are when trying to guess what will happen next.

JLG@mondaynote.com

PS: I’d be remiss if I didn’t direct you recently discovered articles by John Kirk, who calls himself a recovering attorney and indeed writes tightly reasoned posts on Techpinions. I’ll whet your appetite with two quotes. One from Does The Rise Of Android’s Market Share Mean The End of Apple’s Profits? [emphasis mine]:

Steve Jobs wanted, and Apple wants, market share. But they want the RIGHT market share. Apple wants customers who are willing to pay for their products. And Apple wants customers who are good for their platform. In other words, Apple wants market share in their target demographic. Based on the fact that Apple is taking in 72% of the mobile phone profits with only 8% or 9% of the market share, it sure sounds like they’ve aquired the right market share to me.

Does the rise of Android’s market share mean the end of Apple’s profits? Hardly. You can argue as loudly as you like that developers and profit share must necessarily follow market share. But the facts will shout you down.

The other is from 4 Mobile Business Models, 4 Ways To Keep Score where he concludes:

And if you’re going to prophesy that market share alone gives Google data that will someday, somehow, be worth something to someone, then you need to go back and re-read how the “razor-and-blades” business model is scored.

What we desperately need in analyzing mobile computing is far more attention paid to profits and far less attention paid to prophets.

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