innovation playground Idris Mootee

How Much Money Are Apple And Amazon Making From Selling The iPad And The Kindle?

Getting ready for the iPod coming to an Apple stores near you, iTunes TV show downloads is about to happen. Apple will be offering US TV shows for $1 each, as reported by the Financial Times. This coincides with the scheduled release of the iPad sometime April in an attempt to pull adoption. TV episodes are normally $1.99 for standard-definition and $2.99 for high-definition through iTunes. There was talk before the iPad launch that Apple might at last introduce an iTunes TV show subscription service, but it never happened. I am sure that is still on the table, but there are no further details about when this could come together.

Some wonder how much money can Apple made with the iPad, obviously the higher end model is usually more profitable for Apple. I’ve done some quick and dirty research with OEM suppliers and whipped up some estimate. The high end model 64 GB with 3G retailing at $829 will produce a profit of $455 for Apple (and retailers) while the low end 16GB with no 3G retailing at $499 will bring a profit of $213. Assumption for marketing and customer support cost total $15. I have not included in the calculations for those that are sold with corporate discount.

I have yet to confirm the components configuration but are using industry’s current suppliers' prices. These costs will come down when volume increases. And memory price fluctuates. Display is the most expensive follow by the NAND flash memory. If you drop your iPad, I am guessing the replacement cost or that would be $250-$270 although the net cost is $76 excluding labor. I also include a quick comparison with the Kindle, which is not an apple-to-apple comparison, so it is just there for reference. Kindle doesn’t have many of the expensive components as the iPad but elegantly designed as a book reader. Remember the basic rule of design? Make sure you do at least one thing really really good. Kindle makes the downloading experience so easy, anywhere in the world your 3G is working in the background.

All cost calculations here are based on our estimates only, not sources from Apple of Amazon and no one confirm if these numbers are close or off. I think they are close.

Considering the Kindle DX selling for $489 produces a profit of $297. There are costs for some free content not I’ve not included in the cost. There will be many iPad look like in the market selling at the $180-$250 range, the margin for these will be as thin as $30-$40, but you can’t really compare iPad with those poor cousins. Let’s see what’s iPad net contribution to Apple will be by the end of the year.

This Is Just The Beginning Of The Battle Of Ebook Readers. Winners Will Need To Get The Right Combination of Intutive Good User Interface, Display Technology, The Right Price Point And Content Availability.

Everyone is interested in find out how the iPad will be able to create a new user category or expand at the expense of other eBook readers. The future market leader will have the right combination of user interface, display technology, price point and content. The Kindle is a pretty nicely designed product that pretty excel on all fronts except price point. It has enough internal memory to hold an incredible between 1,000 and 2,000, depending on the sizes. They make buying a book is so easy. Following Sony, Amazon and Apple, Acer has finished working on an e-book reader rumored to have a 6 inch b/w screen and will launch in 2 markets in Europe, I think this is kind of a testing ground before they are ready to compete head on with Amazon in the US.

The most important component for any ebook reader is the readability of the screen. Kindle has drastically improved the quality of b/w, six-inch E-Ink screen. E-Ink replaces backlit LCDs with millions of tiny black and white capsules suspended in a clear fluid. The white capsules are positively charged, while the black caps have the opposite charge. By changing the electric field in different parts of the screen, the E-Ink is able to display 16 shades of gray, without a backlight. This effectively help reduces eyestrain as a problem, and that’s is the problem with reading from other tablets.

Another big advantage is E-Ink can also improves the battery life, one charge can last a week even with wireless on. That’s not bad at all. And I like the no-monthly-charge cellular data connection, the Kindle effectively puts Amazon’s entire library of digital books just a few clicks away, anywhere that Sprint has a wireless data network. That’s a very smart strategy. On the usability front, the new Kindle repositions and shrinks the next-page buttons and the faster refresh on the new E-Ink obviates the need for the LCD cursor on the first device which are good improvements.

Samsung will also be launching their eBook readers this year. Sony doesn't have any advantage although an early player. Others that are joining the game including the Taiwan company Asus, they’re working on a dual screen e-book reader. The Asus' dual panel touchscreen concept will try to occupy the low end of the price range and will not come with 3G or expanded storage. I think they are looking at $140-$160 starting price. If you think this is very affordable, just wait.

Chip maker Marvell has created a new ARM-based microprocessor tailored for the eBook market. Together, with Marvell’s other components, the new chip can be used in more functional eBooks with six-inch screens that could eventually cost under $100, there will be many sub $100 players in the market by the end of the year. Anything that is to be sold above $250 will need some series feature and a wow user experience.

Spring Design’s upcoming dual-screen Alex Is an interesting one. Based on Android, Alex features a color lower touch screen with a 6-inch electronic paper display. Using its built-in 3G or Wi-Fi,  you can browse a website, select a story, and the device will reflow it to the EPD screen. The color screen can then be switched off to save power. This makes browsing blogs and news sites much more feasible, since you don't have to wait for the eBook to render individual pages before you get to your target content. I played with this a bit and it is very clever.

4G is well underway, currently tests are being performed in Boston and Seattle with 10 LTE 4G cell sites up and running on the 700 MHz spectrum. Verizon selected these markets because of their geographic configuration of suburban and urban areas as well as the areas' high-technology population. The LTE technology promises to be much faster than current 3G technology and the company expects to deliver services 15 to 100 times faster than these other wireless networks. The actual speeds of the technology have yet to be seen. Mobile media will become mass market and the eBook reader market will be a battleground for innovation the next 12 months. Watch this space.

Is This The End Of The Smartphone? Soon All Phones Will Be Smart. Welcome To The Age Of The Superphone.

I really like this Stumptown coffee place, this one is in mid-town NYC. It is so much cooler than Starbucks. Don't you love the way the people dress? And the coffee is good. uses organic milk and organic coffee, and is cheaper than those expensive ones. who needs hostile coffee snobs first thing in the morning anyway, even I am in NYC.  I hope they stays cool while they become popular. OK this post is not about coffee, it is about Smartphone.

It is funny people still refer some phones as smart phone and some not. Not only the lines are blurred and the market for phone-only phones are shrinking. I think the market are moving into a new segmentation as user behaviors will determine the emergence of different categories of phone/users. In the meantime, there is the IPhone, Balckberry, Superphone, Designer phone (Rolex phone coming), Andriod phone and just phone.

In the meantime, IDC today reported a record level of smartphone shipments for the fourth quarter of 2009, when vendors shipped 54.4 million devices. That's up 39% from the same quarter a year ago, the company said. The handset company with the largest growth in 2009 was Apple. Apple's unit shipments for the year were 25.1 million, up from 13.8 mil units in 2008. The company's market share rose from 9.1% in 2008 to 14.4% in 2009, an 81.9% year-over-year increase. Blackberry finished in second place with 34.5 mi shipments for 2009, an increase of 46.2% over 2008, and a 19.8% market share.

In the latest mobile competitive game, every company is trying to take a page out of Apple's "we design and control the customer experience" playbook, and many don’t understand this is not a game for everyone. Their needs to be many preconditions and one need to understand the behavioral economics of their consumers. Google has finished working on a phone that they want to control the total customer experience, It is a super phone (either produced by LG or Samsung I think) and competing with HTC?

The coming battle of the superphones will be joined by Sony Ericsson Xperia 10, what they have in common are large screens and plenty of horsepower. The HTC Bravo resembles the Nexus One, except for a few changes. It has a 3.7-inch screen with 800x480 pixel resolution and a 5-megapixel camera. For these phones, battery life is an issue. So bigger screens, higher pixel and higher quality camera, Wi-Fi and what else? At what point it stops being a phone?

Today AT&T said it will start allowing SlingPlayer to work over its 3G network on the iPhone. So you can watch your TV program redirected by SlingPlayer. The inability to use Slingplayer over 3G on the iPhone was one of the big issues with the iPhone and now iPad. Being able to leverage my already expensive cable bill to provide content onto a portable device makes far more sense than additional subscriptions, video purchases, etc. The  Slingbox Solo only costs about $140 and with that I cab watch Flashpoint on my iPhone, may be not, definitely the iPad.

This Is A Day That Hundreds Of Tablet PC And eBook Manufacturers Have To Decide Whether They Should Write Off Their Investments And Rethink Their Product Strategy. No One Wants To Compete With Apple.

Apple toady announced the launch of the iPad. No surprise it is a bigger version iTouch or iPhone and you can use the touch screen to send emails, see photos, run slideshows, read books and play video game etc.…all with a bigger screen. It will use flash memory storage with built-in Wi-Fi and Bluetooth and contains an accelerometer and a proximity sensor. It weighs about half a pound, which is equal to one big document. The battery can last for 10 hours and on a standby mode the battery can lasts for month before charging is needed, that’s a big plus. The 16 GB iPad will sell for US$499, the 32 GB for $599 and the 64 GB for $699. The plan will include 250 megabytes per month for US$14.99, and an unlimited plan will be US$29.99, both with AT&T. I don’t like to buy that with a plan but I may not have a choice. I rather buy an unlocked one. Read my last July post (5 months old) on the future of  Apple's tablet strategy.

Jobs declared in the event that “Apple is the largest mobile-device company in the world,” and announced that more than three billion applications, or “apps,” have been downloaded from its online store. The bigger question is what consumer behavior will emerge with this large screen iPhone on the publishing industry? Will Apple be giving the print media industry currently in the intensive care unit a big boost and a chance to recover? Is this device the lifeline for media companies to charge for content? Can this device open up a whole new way of mobile behavior?

Back to the idea of the tablet, I’ve seen so many tablets design and almost all of them are the poor cousins of the laptop PC and trying top hard to do what a PC does. The pen is a bad idea and most of us don’t use it, the keyboard has long replaced that, unless you’re an artist or does technical drawings as part of your job. So even an updated and redesigned Newton is not a good idea. Apple is smart and understand the need to create a new device category around personal media; guarantee great compatibility and connectivity; and get consumers to rethink the meaning of the word "device." Apple is smart not to play in the netbook space. Simply because netbooks cannibalize notebooks. But Apple would love to sell another new device into homes. The iPad doesn't replace anything Apple currently sells. You do work with your Macbook Pro at your desk or at home. You surf with your iPhone while on the go. You carry an iPod to listen to music whenyou exercise, But you'd relax with an iPad on the couch, by the beach, or in an airplane. That's all stuff you do with existing devices anyway, but an iPad can provide a far better experience. Smart move.

So for me, I currently carry a MacBook Air in my briefcase, I also have an iTouch, a Blackberry Bold, a Prada LGtugh screen phone  and a Lumix camera. So in a few months, I will be adding an iPad. iPad is not to replace any of those stuff. And there are some cool accessories too, a charging dock you can use to display the iPad in portrait and a keyboard dock, so you don't have to use a virtual keyboard all the time. I hate virtual keyboard and so this is perfect for me. I don't know why they didn't include the camera.

Publishes such as HarperCollins is working with Apple to make electronic books available for the iPad. HarperCollins is expected to set the prices of the e-books and Apple would take a percentage of sales. Now Kindle has serious competition, I think Google will be joining this game soon. It gets more interesting when the three most innovative companies in the world are competing with each other and Amazon becomes the defender. And Next Issue Media, the new magazine consortium of Hearst, Meredith, Time Inc., News Corp and Conde Nast, is another serious player to join this game. They may end up partnering with a hardware company. Nokia? LG or Samsung? This is an exciting space to watch. Another great b-school case study material.

Will Apple's Home Energy Management System Becomes The Next iTunes? What About Microsoft? And Let's Get Ready For The Big ITouch Launch In A Few Weeks.

Home energy management is hot and I’ve seen more than a dozen of companies having a very similar approach. It is almost hopeless for small start-ups to play this same, as many deep pockets have been working on this for a long time. Whirlpool and energy retailer Direct Energy have joined forces to showcase what the energy efficient home of the future will look like at the CES. I’ve seen some cool stuff from them.

I don’t think anyone have nailed it yet. Whirlpool Home Energy Manager (HEM) includes appliances that tap into a unified network to communicate how much energy they are using, when, why, and how much it is costing. This type of data transmission is what will eventually make it possible for your clothing dryer to know to turn on after your washing machine has finished the cycle. Or let you finish watching your 7.2 Dolby home movie before the oven starts baking. The goal is to optimize the use the of energy between all appliances.

User experience design is still one big challenge and OpenPeak is doing a pretty decent job. They have an iPhone like touch-screen dashboard to manage appliances to run at certain times, use that to change settings and to display consumption data. There are many other players such as Tendril, EnergyHub, People Power, Control4, and OPOWER.  Whirlpool appliances, Lennox thermostats and OpenPeak dashboards together create the product package and Direct Energy will be testing the market in Houston.

The latest player, guess who, is Apple, they just filed an application this week called the Intelligent Power Monitoring that allow people to reduce energy use by giving them tools to manage how connected devices are powered. Users could get recommendations on when to schedule gadget charging to take advantage of off-peak rates, for example. Or the electronics controller could put devices in hibernate mode after a set amount of time. Users could have a display, such as an LCD screen, or a movable projector to control these tasks and monitor electricity use. No question this will be the coolest one.

Apple talks about power management in its patent application as: "Some personal computers sometimes are being left on simply to serve as power supplies for the charging of the aforementioned portable devices via connections, such as USB connections, that provide power in addition to data (rather than charging those devices from the household electric service using their dedicated chargers), even though the power supply of a personal computer is much larger than is needed for such a function, and as such draws much more power than such a function would otherwise demand. As the price of electricity increases, such uses of power can cost users more."

This is definitely going to be another platform play, both from a standard and user experience perspectives. Microsoft is also active in this space and giving away its energy management tool Hohm to consumers for free. Distribution is a key factor here and both Apple and Microsoft has no apparent advantages. Is this going to be Microsoft vs Apple all over gain?

You Think HCI Design Is Hard, Think It Also Needs To Consider User Experiences For The Blind.

Design for many different types of users is hard enough, just imagine one also need to include the blind. Advocates for the blind always complain about consumer technologies not doing a good enough job of making products accessible. The web, while opening many opportunities for blind people, is still riddled with obstacles. And sophisticated screen-reader software, which turns documents and web pages into synthesized speech, are very expensive. And fancy flash-based site is not helping. Picture below is a map reader for the blind, pretty cool idea.

A year or two ago, the National Federation of the Blind reached a settlement of a landmark class-action lawsuit against one company whose site advocates found unusable, Target. In the settlement, the retailer agreed to make its web site accessible to blind people. Not sure why they are picked on. The big challenge is that technology is evolving at such as speed that makes it hard to develop proper guidelines Apple is pretty ahead in terms of accessibility. They’re the first to include a screen reader for the blind on one of their mainstream products.

Google is working on an Android add-on that will make the mobile phone operating system much easier for blind people to use. The API is there, and some basic console work seems to be working already. RIM also have an accessibility API. The traditional mobile accessibility solutions on Windows Mobile and Symbian S60 all require an additional payment of $200 to $350 for a screen reading solution. Mobile screen readers have many technical challenges as interfaces are becoming sophisticated. Touch screen phone is nightmare because if the keyboard as there are too many interactions. One idea is to disable the touchscreen and add buttons with holes etc. I hope we can develop GPS based phones for the blind that can read street signs and directions. I think that is a great idea.

Some universities may not allow the use or recommend Amazon's Kindle DX in the classroom because they are not accessible by the blind. The Justice Department's civil rights division are exploring whether Kindles and other e-readers violate the Americans with Disabilities Act. The federation has said that while it appreciates the Kindle's text-to-speech feature, the "menus of the device are not accessible to the blind...making it impossible for a blind user to purchase books from Amazon's Kindle store, select a book to read, activate the text-to-speech feature, and use the advanced reading functions available on the Kindle DX.

This is adding another level of challenge for the designers. Amazon is now working on new features such as audible menu system. While I think it is important to make the new technologies are accessible to the blind, but we need to be flexible and realistic. Not every new products can pass the accessible test, we can wait till the technology matures.

Apple Is Pushing The Limits Of "Interactivity" And Going 3D. Watch Out Nintendo!

Apple is going to push the limits of “interactivity” and planning to go 3D. Using a camera to detect a user's position and overlay it onto an any on-screen object, giving the impression of a "reflection" and creating a more immerse experience. Apple's latest technology would address that through the use of a camera or appropriate "sensing mechanism."

Apple is filing a patent on this innovation. The technology is capable of defining the visual properties of different types of surfaces and decide on how well it would reflect light. Using this, images of the user and their environment could be recreated on the screen with effects added. "Using the detected position of the user, the electronic device may use any suitable approach to transform the perspective of three-dimensional objects displayed on the display," the application reads. "For example, the electronic device may use a parallax transform by which three-dimensional objects displayed on the screen may be modified to give the user the impression of viewing the object from a different perspective."

"To further enhance the user's experience, the detected environment may be reflected differently along curved surfaces of a displayed object (e.g. as if the user were actually moving around the displayed object and seeing his reflection based on his position and the portion of the object reflecting the image." It's a kind of a virtual reality, crossing over the real world with a digitally created one, but giving the visual perception that an object is real.

This provide game developers new ways to use their imagination to come up with new games that cross the two worlds. It is a direct challenge to Wii. Nintendo has a lot to worry about. Gaming will go 3D very soon. The Blu-ray Disc Association released its finalized 3D specifications. 3D playback will be "display agnostic," meaning that the format will be compatible across "any compatible 3D display." What exactly a "compatible 3D display" is still an unknown, but I believe we need to get a new TV to watch 3D. PS3 is probably ahead in the game.

Is Best Buy Ready To ReInvent Big Box Retailing? Or Are They Too Busy Thinking About Competing With Wal-Mart And Amazon?

There is a Business Week article about how Best Buy is now flexing its market power to help manufacturers and brand owners to develop more marketable products. As the last standing consumer electronic retailers, now they don’t have much direct competition, but instead will be competing with two of the most hyper-efficient retail systems on earth – Walmart and Amazon. 

Best Buy’s CEO Dunn has a vision and ambitious plans to play this game. The big box retailer business model needs reinvention and there is not enough value from selling LCD TVs and PCs. Best Buy needs to be the gatekeeper or tastemaker of consumer electronics. They need to turn their retail stores into giant consumer labs. That way they can shape, influence and even participate in development of new product and service platforms. It makes sense that the big consumer electronics companies won’t like the idea. They want to see the retailers to be reduced to just a distribution channel with little market power. That is not going to happen. 

Best Buy will continue experimenting new ways to engage and enlighten consumers and grow its influences along the way. The big box retailer has optimized their format over the years by using clustering instead of standardized format. It has revamped hundred of stores, introducing "customer-centric" formats to appeal to local shoppers. Can Best Buy reinvent retail economics just as Apple did? Apple retail miracles have proved to be exportable. They broke every rule of retail economics.

Apple's Regent Street store (London) has become a tourist attraction in its own right. Most important it takes £2,000 per square foot. Compare to high-end department store such as Harrods or Harvey Nicols which is making about £700-£750 per square foot, while Topshop in Oxford Circus takes about £1,000 per square foot. Other high traffic electrical retailers average about £700 per square foot. 

The most interesting thing about Best Buy’s strategy is the digital service platform; this one is not as easy. Blockbuster has gone down that path quite unsuccessfully. Best Buy bought online music service Napster a year ago and then took a stake in CinemaNow, Sonic Solution's movie-streaming service. I think they need a lot of more thinking to play in this complex landscape with Apple and Sony seeing this as their core. Thais is what Kai Patel, Best Buy EVP for emerging business is thinking all the time. Wal-Mart and Amazon has a slight cost advantage over Best Buy. Adding Costco and many other online retailers. Best Buy can never compete purely on cost. Best Buy has no choice but to rethink what unique differentiated customer experience can help transform Best Buy with its 1,000 plus stores. 

What innovative new services that can create high margin revenue stream? What digital platforms they can effective build and effectively compete? What are the top three strategic partners (you've to pick your friends)? What is Best Buy new role in supporting product development? If Best Buy is a consumer electronics middle ware, what would they do? Can Best Buy effectively serve the unmet needs of small/medium businesses? What's Best Buy strategy for connective health care? What are the strategic options for redesigning and reinvention of current format? And does Best Buy needs a cool brand like Apple that separates the store from the products? It is probably easier to design a cooler brand than making Best Buy cool.I can go on and on. In the age of rampant consumerism – desire-driven market – Best Buy has a lot of rethinking to do.

Everything is Art In Its Best Form; Business, Technology and Design Are the Same. May Be Art School Wasn't A Bad Choice Afterall?

My first post in a week. No access to Typepad and Facebook in China. I’ve spent a lot of time meeting with designers in Shanghai (both expat and local), potential clients and employees.. Picture above one of the many creative districts and the one below is one of potential office spaces for Idea Couture Shanghai. Design is something that is in very high demand, any form of design from ID to architecture to graphic. Graphic design is mostly what people is referring to when we mention the word “design”. Graphic design has become an art and a commodity, just looking at those printed junks everywhere and most are not even worth the paper that they are printed on.

How is graphic design changing? Is graphic design going way? In the future, everything we touch is interactive and signages are smart and all media will be rich. Will there be a place for print? I guess so, I love printed material, especially coffee table books. They accessorize my home just as a Hermes scarf accessorizes your sweater, or a well-designed book that accessorizes your brand.

What progress has graphic design made the last 20 years? I’ve heard graphic designers screaming, “Design can change the world”. I wonder what a poster or logo can do in driving change. I love graphic design, a designer (at heart) I always treat it as an art, an identify system for our societies and cultures. Graphic art is a great representation of cultures, seeing how emerging markets embarking on a design-maturity journey, I can see graphic design embarks on different paths than we went through. In the next 20 years we will see new emerging graphic languages. These languages are collective, social, global fast moving, reflecting not only local challenges but also global hopes. 

My graphic journey is very much like everyone else. I grew up inspired by Le Corbusier and Bauhaus. Helvetica is the font I used and until we were asked to use ITC Garamond when Apple implemented the new brand ID then. Those work from the Apple Brand ID design team were classic. I actually collect many of them. The Mac graphics cutely abstract, child-like drawings of the computer's components in pure bright colors-red, green, yellow, blue and gray-with a handsome logotype in ITC Garamond Regular, optically condensed to about 80% and then redrawn to give it a livelier look than its classical "parent." This combination of approachable, deliberately Picasso-like “fun” art with an obviously serious logo presents the user not only with a friendly product, but a friend whom you are supposed to trust.

I still have many of the design pieces as my collection. When Clement Mok talked about the design guidelines at Apple (or lack of it): “Steve Jobs had in mind something very simple, something very different from existing standards, and something with a personality-something that would transcend the technological appeal of the computer.” After 10 rounds of comps and living with the engineers in the Macintosh division day-in and day-out for months, we were nowhere. The solution didn’t come until we realized that those engineers are not technicians, but poets and artisans. It came to us.”

People there were spending 90 hours a week working on the first Mac out of passion and the belief that they can change the world. The engineers were using the technology medium to create art: what they designed is really a new art form-that of the 1980s. The takeaway is anything is its best form is an art – business, design or technology.

Apple Has A Dilemma. Should They Make A Netbook? Or Just Make A Big iTouch? I Think We Can Expect A 9 Inches iTouch.

Apple has a dilemma, should they put out products to push Apple towards the mass to appeal to Window users or pushing the innovating envelope on products that their loyal followers really want, or need? Netbook sales is growing fast particularly in Asia and prices have dropped to US$150 to $250. Meanwhile, Microsoft has said that it would rather not use the Netbook name any more, choosing "low-cost small notebook PC" instead. It is easy to see why.

How many years since Apple fans have been begging for a mid-sized, mid-priced upgradeable Mac Pro? How long have Apple fans have been asking for a small footprint $650 range entry Macbook?  How long Apple fans have been asking for a $1600 range tablet that works like a big iPod touch? Apple will not play the netbook game, instead it will expand the iPhone/iTouch platform and develop a big iBook, something that can be used as a large touch screen media device.

Apple will continue to exercise its brand power and design as a tax for those loyal customers. The only time they might attempt at a low cost strategy is probably at the education market. Apple will continue to test the upward limits on how much we can tolerate the Apple premium. I think this strategy is working for them.

It is unlikely that Apple will release a Netbook and instead they might enter with something different. Netbook is a really a low cost pursuit of a mini laptop. On the other hand with the massive popularity of Netbooks particularly in the high school segment, do they want to lose out to these very important customers of the future? 5-6 years from now many of these young adults will become part of Apple’s core customer segment. Wouldn’t it be a good idea for Apple to offer a Netbook killer at this critical junction so they get as many people using Apple products as possible?

This is Apple’s dilemma. But they are covering future options. The US Patent and Trademark Office has just officially published a series of nine newly granted patents for Apple.  The most interesting one is the one that covers an Ink Phase Termination Engine that supports Apple’s Inkwell technology and a future Tablet device supporting handwriting applications. The evidence for Apple’s interest for an Apple based Smartbook-Tablet hybrid device is apparent. But this will not come soon. The next logical step is a large size iPhone. Call it iBook, iReader, iPad, iScreen or IPanel.

Apple’s granted patent generally relates to an ink manager for acquiring and organizing pen-based ink information for use by pen-aware and other applications. Although the current iPhone is dependent upon using your finger as the input stylus, a future larger tablet could in fact accommodate a stylus or pen-based input system as well so as to address both handwriting and drawing applications. Such a system would be able to tap into Apple’s Inkwell application that is noted a as a key technology under OS X Snow Leopard. The illustration filed shows us that the tablet could provide a series of horizontal lines to assist users align their handwriting. Various control buttons could provide commands for scrolling purposes or to call up any apps.

Apple’s working concept of a Smartbook-Tablet Hybrid was illustrated in a series of three patents covering gestures, scrolling and Synchronization. When you combine Apple’s granted patent 7,564,995 published this week with a more current 2008 patent revealing a tablet-smartbook hybrid, it becomes clear that Apple is seriously contemplating a move into the smartbook market. But it will not look like a tablet for sure.

The key question with the tablet device is that what does it replace  or it replaces anything at all. We have the iPhone or iTouch or Blackberry for email and we usually have a laptop, why do we need a tablet? You're still going to need a real computer and a cell phone to get things done or for lounging-around-consuming-junk-media. And real laptops are only going to get lighter and thinner, why do we need a tablet? There are now multiple speculation that an Apple tablet would be essentially an oversize iPod Touch, and will cost somewhere between a $299 iPhone/iPod Touch and the $999 MacBook. I am guessing a $500+ iBook or iPad or iReader with touch screen capability and Wi-Fi and 3G. And hopefully in different colors too. We will find out if I am wrong.

What's Apple's Future Beyond iPod? Apple's Strategy Is To Win At The Top As Well As The Bottom.

 A crazy week finally coming to an end. Good things happened this week, signed the lease of another floor of beautiful office space and interior work begins today. Will take at least 5-6 weeks before the Herman Miller chairs arrive from Michigan and the Barcelona chairs and other furniture arrive from Milan. It is a great space and we're lucky as this space was only listed in the market last week. We will have lots of space for collaborating. Innovation is about attacking the white space, literally we will be creating lots of white space for innovation. I think this additional office will end up looking like an Apple Store.

Talking about Apple, I remember my first Sony Walkman, it was 1970 and I don’t remember when it officially ceased production when replaced by portable CD player. I think around 1985 so we are talking about a 15 years product lifecycle. I think in year 6 the Walkman eventually being fully commoditized and the market was flooded with low cost and differentiated players. They are still leveraging the Walkman name, Here’s the good part, when they launched its line of smallest flash-based music player in 2003, the players used Sony's proprietary ATRAC format and won’t play MP3 format. So it is an MP3 player that doesn’t play MP3. They were available in a number of capacities, up to 1 GB and that’s pretty impressive. The first of these Walkmans was the NW-MS70D which had an impressive capacity of 256 MB. They were not bad products, but totally out of touch with the digital culture. What about iPod? No question it will eventually fade away like other great innovations, but when will that happen?

On Oct 23, 2001, Steve Jobs announced that “listening to music will never be the same again,” and that marked the big comeback of Apple. Apple may not have invented the digital music player but it did turn the MP3 player into a popular culture phenomenon. The first iPod holds 5Gb of music – about 1,000 songs and costs $500 (or £349). I remember a story about how a tech guy posted a story in 2005 about how he proposed to his girlfriend via iPod. He bought his girl an iPod Nano with his proposal engraved on the back - the best part of the story? She said yes.

This is year 7 since the first iPod launch, Apple will still continue to sell millions of units every quarter, at least they will sustain good unit sales and revenue growth for a while. But the company is seeing the end of this product platform and the strategy would be to milk this for 3 (or 4 max) more years. Don’t expect any major innovation for the iPod. The iTouch is probably the last big change.

The iPhone will take over as the focus and expect Apple to come up with different models, IPhone Nano or iPhone Business or iPhone Air? Convergence would force multi-function devices to specialize and the iPhone is in its second year of a 5-6 year of innovation cycle. Apple will leverage their technological innovation and ride the cost curves in the next 24 months to bring a new level of value to customer. Apple will not solely compete on the high end but also the lower middle market. Let me make a prediction. Expect a $750 MacBook in 18 months (there's rumor about a $800 Macbook but I don't think that will happen, Apple has not reason to push that under $1,000), a $150 iPhone and free iPod (or subsidized), just subscribe to iTunes on a monthly basis.

The other growth platform would be movie download, existing Apple owners are twice as likely as others to use an online movie download service that extends to the home TV. If Apple TV drops below $200, the demand will jump and push sales above $10mm.

I think the iPhone will become the smart controller of home entertainment including music on your computer or Apple TV and control playback from anywhere in and around your home. Or even as remote control for your coffe maker. Here's one new application for the iPhone. How about iDating?

If You Have Not Bought The New IPhone, You Will Have Another Choice Soon. Introducing the New Nano iPhone.

Industry sources are  now talking about an iPhone Nano to be on sale this Christmas. It is rumored to be available for the pay-as-you-go market. It is expected that this will be much lighter than the current iPhone and could have a touch wheel interface on one side and a screen on the other, meaning that calls would be dialed from behind. It may not have full Internet browsing functionality as in most smart phone. The new nano iPhone will adopt a form factor that shifts away from the almost square dimensions of the third-generation nano back towards the general shape of the first- and second-generation models.

I actually like the earlier taller nano from a form and function perspective. I think they will expand the screen size a bit and I’d gladly accept a wider/longer screen if it meant not having a wide-bodied player. There are some serious usability challenge to incorporate phone features into a Nano. The patent filing suggests that the design pertains to a user interface for controlling an electronic device, particularly a multifunctional electronic device that is capable of operating in multiple modes as for example a phone mode for communications and a media player mode for playing audio files, video files, and the likealso suggests the use of a scroll wheel, similar to the iPod. It is believed that the Taiwanese metal casings supplier for the iPod Nano, Catcher, is positioned to become its major supplier for casings for the iPhone Nano.

 
I will probably get one. Hope it comes in different color too. For pricing, I can imagine it will cost anything from $250-$280 and will use mass retail channel and not through any carrier. I think a thin iPhone is more desirable for many who won’t need all the features. I currently have a Prada touchscreen phone and it is much lighter than an IPhone. I am sticking with it until the new nano iPhone is available.

If you wait a few more months you may have  another choice “Maple Phone”, designed by Hyun Jin Yoon and Eun Hak Lee. Is a compact wooden phone made of African Blackwood. The phone appears to be a simple block of wood until touched, at which point its touch-sensitive buttons light up when you touch them. It also has a display that is placed at the back, that slides open. Not yet in production.

iPod's New Podcast Mashup Services And Power Point Karoke

Apple recently filed a patent that describes a method for automatically creating customized podcast mashups from various podcasts. It is a good idea to allow people to download a fully customized podcast.  Users are able to influence or control content within a media item being personalized. In one embodiment, personalized media items are podcasts. Users are able to influence or control the content in or with a podcast. In other words, a podcast can be created in accordance with a user’s needs or specifications so that the content within a podcast is customized or personalized for the user. What Apple is proposing is allowing users to sample/ take portions of multiple podcasts that meet their interests, and download a combined podcast that includes the specified extracts requested. Think like an RSS reader where you get bits from multiple sites, but in audio. Apple is continuing the push of iPod to become a platform other than a music player.

The patent talks about stored podcast characteristics, which may tie-in with Apple’s patent for “Podmaps.” A Podmap is not unlike a sitemap, but obviously for audio, and would specify what was in a podcast when. In theory this new patent could extract audio from a larger podcast per the specs in the Podmap and place that audio in a new custom podcast besides material from other podcasts. It’s a neat idea, but sampling data from an audio track would bypass things like preroll advertising in a podcast which may undermine the blossoming podcast advertising market.

So what's next for Ipod? Here's an idea.....how about iPod karoke? Ugg?

Talking about karoke, have you heard about Power Point karoke?  You have to be either German or a hardcore techie. The phenomenon has been spreading geek to geek and conference to conference since it was invented by a German artists' group back in 05. PowerPoint Karaoke sessions have been held at last year's E-Tech conference in San Diego, the Chaos Conference in Berlin, and at smaller tech gatherings in Los Angeles, London, and Montreal. It is simple, pick a deck randomly and then present it in front of a large audience. Interested?

I am sure we've all came across scenarios when people present a deck full of garbage and then start talking vaporware. Power Point, like Karoke,if placed in the hands of the wrong people can become dangerous (yes, a real killer app) and a means of torture and incredible torments for many. It is still a fun idea, we should do that in the office every Friday....Karoke Power Point day! Gotta to go bed..early flight to New York tomorrow morning.

Mac Addicts' Bling Bling

Everyone fancy our MacBook Air when we were using to for presentations today. As far as I checked with the people at two New York Apple stores, the wait lsit is still 4-5 weeks. So before everyone gets them, we will use them to show off.  It is a matter of time when jewelry meets technology.  The idea of blinging-out your electronic gadgets is here. Computer Choppers has gold-plated one MacBook Pro for the public to ogle, in all its gleaming wonder. They also offer a great deal of electronics customization, aside from coating your MacBook in 24 karats of yellow precious metal for $1,200-$1,500.  I am not sure if they can coart your iPhone in gold too. I don't see why not. They also offer an upgrade path for platinum or gemstones. If you have a few bucksto burn, they will glamor up your Apple logo with diamonds or sapphires. I think they also do regualar laptops, but who would want a gold Dell? Uh. And if you are really into gold, this is the car for you.

For all of you MacAddics, MILK desk from Heckler Design is just for you. This sleek desk, “OneLessDesk” combines 2 desks in one, one for your 24-inch flat-panel display rather two 24-inches and other Apple goodies…iPhone, Shuffle, Nano, Touch, iPod Classic and the other for your peripherals. Once you are finished with the work, lower ‘deck’ glides effortlessly under the upper deck for a neat and spacious feel. OneLessDesk occupies about one foot of space from your wall so you can enjoy the extra space anyways or you can use the independent desks in just about any configuration. The designer desk also features an out-of-sight, rear-facing perforated shelf to hide the wiry mess all in ventilated, heat-sinking comfort. OneLessDesk is constructed entirely of thick, 12 gauge stainless steel, fully welded, and sports a beautiful, non-directional brushed finish. perfectly match your ultra modern style. Only 100 OneLessDesks will be produced and they only costs $900. Hurry up.

Apple Product Roadmap 2007-2010

I wrote about the new iPod a few weeks back. It was finally announced today...an iPod Touch and a new nano. The iPod Touch looks like iPhone minus the phone capability. As widely predicted, it is wi-fi enabled, comes with Safari browser, calendar, contacts etc. With its gorgeous 3.5-inch widescreen display, iPod touch is great for watching your favorite TV shows. The iPod touch has a built-in accelerometer that automatically senses when you rotate it into its landscape position. When you're in music, it automatically switches to Cover Flow(TM) so you can browse your music collection by album cover artwork with just a flick of a finger. When in Photos, it automatically displays the photo in its landscape aspect ratio; and when in Safari it displays the web page horizontally. iPod touch also has a built-in ambient light sensor that automatically adjusts the display's brightness. They are talking about 22 hours of audio playback and up to five hours of video playback time with a charge.

What's missing is a social network capability, add a close distance sensor and a little piece of people matching application, this will become a killer gadget. Here is Apple product roadmap as I see it ( Freebie idea for Apple Inc. with compliments from Idea Couture Inc. ).