Category Archives: iPad

iPadonia and the coming ad rebellion

Years ago we met a woman from The Institute for the Future (yes, there really is such a thing) who said, “the mistake people make is overestimating how much things will change 100 years from now, and underestimating how fast things will change tomorrow.” She was right — it’s 2011 and we’re not booking vacation trips to Mars, as 1950s sci-fi writers predicted, but we use tiny glass computers in our pockets to communicate to anyone around the globe. Message formats are immigrating to iPadonia, and unwanted marketing messages aren’t invited.

Tablets will proliferate because the most forceful change of our society in the past 50 years has not been in clunky technology shapes (no home-cooking robots or highway hovercars, alas) but in communication formats. Much of this is silly. The first decades of this century will be recounted by historians as a time of faddish media tweaks: we all watch video and read typography still, yet we’re obsessed with minor nuances in how we do it. 3D TV, streaming Netflix, Apple iTunes, Facebook and Twitter merely reformat text, sound and video. The innovation vectors converge around mobility, with portable glass pads the end point of mental input. Soon, we’ll have windowpanes that do everything, and that will be that.

For a hint of this future, check out Dynamics Inc.’s new smart cards — a type of credit card 2.0 that allows you to tap a button to switch between bank accounts, or hide the numbers on the card’s display until you input a keycode. They are rudimentary compared to today’s iPad, but show the technology of powering variable inputs and outputs now fits into a slender wafer. Compare a Nokia cell phone from 1999 (remember? the one with the little black-and-white screen that was as big as a remote control so you had to clip it on your belt?) to today’s iPhone, only a decade later, and now imagine what the next 10 years could do to Dynamics’ smart card format. Those tiny cards will be tablets connected to the web, pulling in any information you want.

The price for all this will fall, first by half and then one-hundredfold, until smartpads cost $10 and are given away by The New York Times in return for an annual subscription. Tablets will win because they are the end line of print communication format — from carved stone plates to paper to shape-shifting pixels in full color. Sure, producers like Apple will try to defend prices and margins by adding cameras and higher resolution screens in the next few years, perhaps 3D images by 2015, but eventually the tech tricks will run out. To modify a classic quote from Altimeter Group’s Charlene Li, in the future, tablets will be like air.

This unstoppable trend creates conflicts, of course, in business models hinged upon old paper formats. Some journalists and publishers still deny the shifts (magazines still have power! goes one campaign from The Association of Magazine Media), confusing their value as aggregators of news and opinion with what Clay Shirky calls the accident of our society printing words on crushed tree pulp. The medium is not the same thing as the message, and using fuzzy newsprint to read about a presidential speech has no more logic than a writer scratching the news report on the trunk of a tree in your yard. The emotional repulsion journalists feel toward electronic media really is fear driven by the dying pulp-paper advertising model, one where vast reams of impressions are wasted, where marketers pay $10,000 for a newspaper ad supposedly reaching 1 million people, but likely 95% of those readers skip the page B12 that carried the ad and only a fraction of the remainder glance away from editorial copy to read it. Tablets, like web pages, have reduced visual inventory of ads, and as the bloated paper boat of waste sinks, billions of ad dollars may disappear as well. Of course producers of web, tablet and mobile content should not feel smug, because approximately 90% of online ad inventory now goes unsold as well. Most ads are never seen, and much of today’s ad space is going away.

A society voting ‘No’ to advertising

TV is still the king of media, with U.S. consumers watching more than 5 hours each day — but its ads tell the future’s story. In the United States, viewers receive about 130 channels per home, and yet “tune” to only 18 channels each month (people no longer channel surf by turning dials, but instead hit “guide” on the remote or punch in 33 for CNN, leaping to the channels they know they wish to watch). Behind this 86% waste, DVRs are now in 1 of 4 homes helping consumers skip all TV commercials. Billions of dollars flow to those TV outlets, ignored by most people, and while pricing is supposedly based on audiences per channels, eye-tracking studies by Nielsen and Ball State University have found that when TV spots air most consumers look away to read a magazine or peck at a cell phone in their lap. Ad impressions are a currency that is being devalued, and real ad inventory will shrink further as consumers move to on-demand content.

Portable tablets will accelerate this ad skipping, because high-def print and video content on a pane of glass, connected to any provider and sendable to any friend, will trump old formats. Publishers had hoped that iPads would lure new revenue from consumers willing to buy subscriptions for finger-swiped enhanced content; Jason Ary has a nice dissection of the failure of this model. Consumer behavior isn’t really changing; just as your 2011 house still has shingles, in 2021 you will still read and watch video. But the power of marketers to intercept consumers will fade as screens become smaller and more mobile.

How to respond? Advertisers are left with three choices:

1. Notability. Create stories that are talk-worthy enough for consumers to want to pull them onto their shiny panes on the merit of the content. The brilliant 2010 ads for Nike and Old Spice by Wieden + Kennedy, for instance, created millions of conversations. The Mullen agency’s coopting of the Super Bowl into a “Brand Bowl” chatbox about ads lets consumers create a metabuzz about which marketing messages work best. The challenge, of course, is thousands of ads are brilliantly creative and yet society responds enthusiastically only to a handful each year. There’s a lot of randomness in turning a concept into a meme that resonates within cultural context; achieving viral success is like throwing dice in casino.

2. Targeting. The second option is for advertisers to use hyper-targeted media formats that make the remaining ad inventory work. Banner ads, online rich media, and online video are moving away from individual publisher sites — where 90% of ad inventory goes unsold — to ad exchanges, or biddable marketplaces, where the same banners can be targeted against specific audiences at huge cost savings. Tricks such as site retargeting and media-based retargeting chase individual consumers with repeated impressions. Media as stodgy as out-of-home is moving to demographic ratings by billboard location, trying to show they can target better as well. Experimentation in this space is key, and media planning has become a crucial science for getting advertising results.

3. Sponsored thoughts. Or, more darkly, advertisers can blur the lines between editorial and paid messaging. Publishers are toying with this, desperate to keep the ad dollars flowing; no less a publication than Forbes announced last week it would blend articles written by advertisers with its paid staff on the new website, potentially discoloring its authenticity. Sponsored posts and tweets, spammy Twitter direct messages, product placement in films are all what we call “sponsored thoughts” — attempts to trick consumers into believing a paid message came from the mind of the opinion leader or entertainment creator. This creates problems in ethics (is it right to blur the source of an idea?), in influence (consumers confused by the source of the message are uncertain how to process it), and in pollution (there is a tragedy-of-the-commons risk here, if overexploited, untrusted paid communications make the network they ride upon less valuable to users).

In the end, networks are self-correcting, and consumers vote with their feet. We’ve gone through this with telemarketing in the 1990s, in which consumers rebelled by signing up for the Do Not Call list, and email solicitations in the 2000s, which largely have been blocked by spam filters. Media is only as valuable as the audience — advertisers don’t buy ad space, they really buy eyeballs — and the audience migrates to the content it finds most useful, setting up filters around the content deemed an intrusion. Facebook is rising fast because consumers have more control and less marketing interruption. YouTube and Hulu have succeeded by offering immediate choice and minimal advertising. When the inputs and outputs converge into tiny glass screens, the trend of advertisers being squeezed out will continue.

So, pick your solution: Find a way to get more notable, get smarter about targeting, or disguise the source of your message. We recommend notability and targeting … but expect to see more of the third, paid content pollution, as marketers grapple with the shrinking tablet ad inventory held in the palm of your hand.

iPad’s new screen

It’s hard to believe but the current iPad you own/are coveting has a lousy screen. Really. You don’t notice it now, but wait until Apple unveils the new iPad 2 in April 2011 with a “Retina” display with 4 pixels per every single pixel on the screen now. Yowza. By offering many more glowing dots per inch, the new tablet model will look photorealistic, the type font serifs as sharp as a glossy printed page. The screen will disappear entirely … and the current model will look fuzzy by comparison. We know, because we own an iPhone 4 whose Retina screen makes the 3GS look like a Hasbro Lite-Brite.

AppleInsider has a nice rundown (brilliant work by Daniel Eran Dilger, really) of the changes in screen resolutions, and the tradeoffs designers must make by either making icons smaller (that is, tighter pixels are akin to moving a TV set further away from you, so everything must look smaller) or doubling up so the images are the same size but twice as sharp. Apple messed up on this choice a bit with the new MacBook Air, a beautifully thin computer but whose 11-inch screen is so tight, the tiny program icons and text are nearly impossible to read. Word is the iPad 2 won’t make the same mistake, but instead will keep objects larger and simply 4x as sharp.

We bet Apple will use the new iPad screen resolution as a competitive differentiator to fend off other tablet wannabes, who perhaps will have more cameras (front and back) or other gizmos, but not a screen where pixels are so fine they become invisible. Apple has to make this move, because the competing Samsung Galaxy Tablet is already sitting in AT&T stores next to iPads, and the Galaxy’s screen thanks to its roughly 50% smaller dimensions — get it? smaller screen size with same number of pixels equals tighter, oh, never mind — appears sharper than the current iPad gen 1. Given the sundry nuances of tablet program/app design, a Retina screen on iPad 2 will give Apple at least two years to fend the fuzzier boys off.

Ah, product obsolescence. It would be crass to think Apple plans things like this.

Update: Daring Fireball’s John Gruber thinks the higher-res screen will come eventually, but not in the iPad 2 update. We’ll see.

Nike’s GPS watch and the new age of dongles

This is more than a Nike+ SportsWatch with GPS that allows you to track your runs without using an Apple iPod. It’s proof that we’re entering an age of dongles.

A dongle is technology key, usually a bit of hardware that forces you to use a certain software or operating system. Own an iPod? That gadget locks you to the Apple iTunes store. Dongles started back in the 1980s when software makers would set up unique connection pins so their software could only get power or data if you used the gadget. Today, falling tech prices have led the big content portals to build their own dongles: Droid phones with hot keys for Google search; Barnes and Noble Nooks that sell B&N books; the Amazon Kindle … the list goes on.

Consumers typically put up with dongles because the value of the content they are connected to seems worth it. You probably never think that your iPod constricts you to only Apple-sold music and videos, because the library is so big it feels like freedom, but you’re really in chains.

Now, however, with chip and screen pricing continuing to plummet, niche businesses can build their own dongles. Nike+, an online running log and social community, has relied on Apple iPod dongles since it launched in May 2006, back when devices that only played music were $150 and it took scale to get to market with tech. Today, dolls have cameras and Android tablets that act as microcomputers can be had for $200. So dongles are proliferating. LENA, for instance, is a gizmo that attaches to a baby’s clothing; it listens to all the words spoken to the child over the course of a day, parses male voices from female’s, and then uploads the data into a software program that tells the mom and dad whether they are speaking enough to their child — a Nike+ for language development.

Are tethers good business?

The obvious question is what portals are these new gadgets locking us into? But the deeper query is whether dongles are a sound strategy for marketers. Sure, it’s tempting to want to add technology to your service to lock your users into your proprietary system. Nike is obviously doing this; the new watch is much clunkier than the old Apple-powered ones, which are as of this writing conveniently out of stock. But as more businesses build walls to hold customers, consumers may rebel as they lose the ability to share across platforms. The corporate desire to tie a customer down is diametrically opposed to the human need to connect.

We’ll see how it plays out with Nike on the road.

iPad lures $100k households away from magazines

If velocity is distance over time, the iPad is moving fast. Ipsos Mendelsohn, a research group that studies media habits among affluent Americans, reports that newspaper and magazine use is down 16% from 2009 to 2010 among households earning more than $100,000. (Note: Use means time spent reading, not number of issues delivered to the home.) Mendelsohn’s survey of 13,804 affluent individuals found their Internet use jumped from 22.6 to 25.3 hours a week in the 12-month period. Those $100k households represent one-fifth of the U.S. population, and are one of the sweetest targets for advertisers. With so many eyeballs skipping away from old print, marketers will see declining results if they don’t put mobile and display media in their plans.

Mendelsohn’s president Bob Shullman told ClickZ, “Right now about 98% of the affluents are online — compared with 70% of the rest of the population — and they have lots and lots of digital devices.”

As for the iPad itself, Apple’s tablet is attracting affluent younger users. Nielsen has found those willing to drop $499 on a new technology gadget skew male (65%), younger than age 35 (63%), and relatively affluent (50% of the individuals earn more than $75,000 a year). This contrasts to only 30% of all mobile subscribers making more than $75,000 a year — indicating Apple is locking in the future affluents with its tablet devices.

If you target upscale customers, it’s time to rethink the media plan.

Image: Elsonpro

Of magic books and micropublishing

IDEO has mocked up the future of the book, where reading gets three new twists: informational layers (the “Nelson” prototype above), social connectivity (“Coupland”), or narrative interactivity (“Alice”). While it should be no surprise the convergence of words and tablets will open up possibilities, what’s most interesting is the probable impact on the publishing industry — soon to be replaced by micropublishing.

You see, today publishing is hard and risky, with every book an unknown start-up business model, so the boys in Manhattan make money by promising to remove that friction. But what happens when friction disappears? Anyone in the future will be able to write and publish books using almost-free tools such as Apple Pages to whip up layouts and then email, Twitter, text or signal-share it to the masses. Big-city publishing houses that once vetted authors, forced them to shill through their networks to sell the minimum amount of books to get to $100,000 in break-even revenue, will fade as your son learns to publish professional views on the final Hogwarts twist to his friends in 6th grade via $99 iPads. Write. Layout. Send. You’re done.

Information wants to make money

Of course this means clutter, fragmentation, the PDF version of a million Wikipedia pages. Cheaper access will create a groundswell of new content inventory 10,000x more than that on today’s Web. The pressure on publishing will accelerate, because old third-party ad models that paid for some editorial gates (once called “magazines” and “newspapers”) will be small compared to the wordsmith tide. There aren’t enough advertising budgets in the world to fill all that space even at 5-cent CPMs. Advertising will still work, but only in subsets of the content, the Super Bowl/Harry Potter hits of the world that ride the Pareto power laws above the long tail of mass self-proclamation.

The twist is that individual writers, unlikely to scale to Rowlingesque masses in this new sea of content, may start charging more for their own work to the few who are interested. When content/writer/video/photo producers hunger to make money and marketing can’t subsidize the costs, the creators will want a greater slice of publishing pie. Books will still cost money, but perhaps you’ll pay it to the close circle of friends who write what you want.

Micropublishing will arrive because in a world of perfect informational networks, the closest distance between two nodes is a straight line. Tablets, beam away.

Apple’s 7-inch iPad decoy. Just in time for Christmas.

This is how Apple will defend the price of its $500 iPad.

We start with a Taiwanese newspaper report that Apple is building a new, smaller 7-inch iPad due in stores this Christmas. If you wonder why Apple would place yet another product between its iPods, iPod Touches, iPhones, iPads and actual computers, consider it the basic business strategy of a decoy.

A decoy is a product, service or simple price point that is offered not because a marketer wants you to take it, but because it creates a reference point to make another product look better. A BMW salesperson might show you the 7-Series that costs $90,000, knowing it’s too rich for your blood, but by comparison a fully loaded 5-Series sedan for $59,000 suddenly looks like a bargain. Or conversely, a Realtor might guide you through a colonial that needs a lot of work for $390,000 — knowing by comparison the pristine colonial she shows you next for $410,000 seems like a better value for less headache. Dan Ariely in his book Predictably Irrational suggests that for any product “A,” if you introduce a slightly worse or more expensive version “-A,” you are more likely to get consumers to leap ahead:

“In essence, introducing (-A), the decoy, creates a simple relative comparison with (A), and hence makes (A) look better, not just relative to (-A), but overall as well. As a consequence, the inclusion of (-A) in the set, even if no one ever selects it, makes people more likely to make (A) their final choice.”

Do you really want the small one?

Which brings us back to Apple. By introducing a slightly smaller, worse version of the iPad tablet, Apple kills two birds with one stone. It can sell the tiny gee-whiz gizmo to consumers who don’t have cash for a $500 toy; and thanks to a lower-end decoy, it makes the upscale tablet look better — and defends the high price. It is no secret that other manufacturers are rushing to produce tablets at lower costs, or that Apple in the past has been forced to rapidly reduce its prices to extend its toys into the mass markets. But if the decoy can help Apple defend the iPad’s high price point (we bet $400 by Christmas, with the small 7-inch logging in at $300, take that tablet market share!) for even six additional months, Apple will make millions more.

So go ahead. Enjoy the new, tiny 7-inch tablet when it emerges. But if you walk into an Apple store to look at it, and then find yourself lured by the bigger, more expensive iPad, congratulations: Apple’s decoy has worked.

Apple escaped ‘lock-in.’ Can you?

Lost in all the buzz about the iPad saving publishing is the fact the tablet thing works as a real computer, too. Fast-forward the video above to 1:40 and you’ll see Apple SVP Phil Schiller demonstrate how to edit spreadsheets on a glass screen with finger motions. Our “ah-ha” came when we noticed that the iPad’s virtual keyboard changes based on user modality (3:04). If you’re working with formulas or numbers or dollars or text, the input fields adjust. The obvious question is whether Apple’s $500 iPad will cannibalize its $2,000 computer sales, or the sales of the broader PC industry whose Excel, PowerPoint and Word programs will run inside the iPad’s iWork suite.

Avoiding path dependence

But the deeper issue is whether Apple’s emergent design will break the lock-in endemic in laptops and PCs. Lock-in has several definitions: In technology, it’s the dynamic where one design is followed by so many subsequent designs dependent upon it that it becomes nearly impossible to change the original arrangement. Examples include U.S. automobiles with steering wheels placed on the left side, keyboards with a QWERTY layout, and Microsoft Word with “Toolbars” mysteriously nestled in the “View” drop-down menu instead of the “Tools” drop-down list where you’d expect it — all designed systems that are now nearly impossible to change because traffic patterns, hardware designs and millions of documents are locked in to the original concepts. But lock-in can also refer to mindsets, such as the escalating commitment of decision-makers to a bad course of action. Conservatives could point to a jumbled U.S. healthcare reform law; liberals could point to U.S. leaping into war in Iraq — all are outcomes of processes involving path dependence, where the options for decisions at any point grow more limited based on the commitments of the past.

You know. It’s too late to stop now.

Mitch Joel suggests that smartphones in the U.S. will grow to about 33% market share by the end of 2010, creating a plethora of new gadgets that could challenge the interfaces of the computers we’ve been stuck using for the past 25 years. Imagine that: the world of technology is going through a rare shift in which past lock-in is being broken, where radical new device usability could emerge, where “toolbars” might be located under “tools” where they belong. We all suffer from lock-in: The religious and political points of view our parents ingrained in us, the business committees pushing investments that follow other sunk costs, the temptation to follow a fad because our ecosystem of friends or colleagues have all jumped aboard and we can’t pan out to the worldview around it. The question is: should you evaluate your own life for paths you’ve gotten locked into that might need shifting?

How Apple could destroy publishing in 5 easy steps

Publishers such as Condé Nast, masters of our beloved Wired magazine, are so hopeful the iPad and the tablets chasing it will revive their economic health: you know, more readers will pay for subscriptions; no paper means lower operating costs; advertisers will suddenly yearn for higher CPMs to get aboard such gorgeous, interactive content …

Yet perhaps Apple has deeper motives for the iPad, say, moving the margins of the book and magazine industries directly into its own pockets. (See: iTunes, the No. 1 music vendor in the United States.) Here’s how Apple could destroy publishing in five easy steps:

1. Launch the iPad, then gradually reduce price points while adding features (webcams, backside video cams, slimmer bezels, 3-D) until ramping gadget sales achieve lock-in for Apple as the de facto tablet-cum-publishing store in the world.

2. Upgrade the Apple word processing program Pages to include simple templates for books, novels, pamphlets, and magazines, all publishable electronically as gorgeous interactive PDFs. And just as an iTunes software version exists for Windows, promote a version of Pages to work in Microsoft environments as well.

3. Give consumers new incentives to publish books or magazines themselves by including interactive ads that fit in the margins of their self-published PDFs. You’ll get paid for every thousand eyeballs reading your stuff, and advertisers will compete for this new form of contextual advertising tied to GPS location systems built into the iPad.

4. With a click, allow these aspiring authors to upload their now-beautiful, already monetized book layouts to the iBookstore.

5. Build in social media features to help you promote your own book to your network of followers on Twitter and Facebook, and pray that they scale it to their friends.

You may not sell a million books or a best-selling magazine, but you’ll no longer need all that thorny pitching, rejection, approval, editing, and self-whoring that comes from working with big publishing houses. Don’t look at us. Chris Anderson called his own book “Free.”

Goodbye, gadgets

Around 1998 or so a funny thing happened to personal computers: they all started to look alike. Same plasticky keyboards, same ashen boxy monitors, and Dells and HPs all began to blend. Gateway resorted to opening retail stores with farm themes and shipping packages splotched with cow designs. PCs were slapped with stickers touting — wait for it — Intel chip speed to stand apart. But then flatpanels came along, and then Apple tweaked first colors and then glass-like translucent shells and then carved aluminum, the same cheap material you wrap leftover fish in — but, today if you peer above Engadget for a moment, you might see it.

Once again, gadgets are all starting to look alike.

They’re becoming frames. Just screen casings. Droid phones and iPhones and, yes, the best current example, the Apple iPad, just shells for digital content. (That’s right, you’re considering dropping five Benjamins for a black electronic frame.) Which makes us wonder, as we approach the singularity of device transparency, when the iGenie gadget of 2020 morphs from handset to laptop to big screen to projection on the wall of your bedroom, cradling content like a slender, almost invisible mother, will hardware designs even matter? Ludicrous to suggest, perhaps, as we still battle over cell phones with sliding keyboards or Kindleish left-right e-reader buttons. But the singularity is coming. How will device manufacturers compete when the view inside the window becomes more important than the border around it?

Image: Gizmodo via Photo Giddy.

The end of typing

IQ test: Can you connect these dots to predict the future of computing?

1. Apple has launched its iPad.
2. Google has responded with its own tablet design (shown above).
3. Apple’s iPad includes a hidden frame that has room for a future webcam, useful for video broadcasting.
4. Pew says teens and young adults are doing less writing online and more wireless with graphics and video.
5. The hottest communication trends are Twitter (140 character updates) and Facebook.
6. Mary Meeker, the Wall Street analyst who foresaw the impact of the Internet on business in the 1990s, says soon we’ll live in world of 10 times as many Internet devices — and most won’t be computers.

Pencils down.

Typing is dying. The QWERTY keyboard you pound emails at is really an anachronism, an interface designed to slow your keystrokes so the mechanical levers of a typewriter (which no longer exist) won’t jam. Typing has never been very popular; the vast majority of the world does not have college degrees, works outdoors and is more mobile than sedentary, and has no need to write missives back and forth because they know how to talk to each other. Yes, the Internet has created renewed interest in reading, but only a tiny fraction of the educated public creates such materials, and video is now emergent — YouTube video searches, for instance, now account for one-fourth of searches in Google. The history of humanity is tens of thousands of years of communicating via face time, with verbal grunts and waving hand gestures which explain why today plane tickets to meet far-flung business partners in person are still required.

So if Apple and Google are investing their billions in a future of computers that is sans keyboard — smaller, more mobile devices that are merely glass screens with user interfaces that morph based on how and what you look at — then the keyboard, even the shiny aluminum one on a beautiful Apple MacBook, may soon become irrelevant. Computers should be simple after all, because they are frames designed to get information quickly, and the newest models require only touching a picture to get what you want. When every appliance hooks into the Internet with a touch screen and we can pull or push data with an intuitive tap, control-alt-delete will be remembered fondly for what it was: an archaic system that allowed programmers and business bean counters to toy with devices too complex to be used by the real masses.

(Google demo via ad guru Angela Natividad. Inspired by Bob Knorpp, who taught us in the past year that voices can be more provoking than written words.)