You say iWatch, I say Pip Boy Junior

There’s be a lot of discussion over the rumored iOS-based Apple watch (not to be confused with the recently released third party Pebble). Some argue about the need for such a device, some what function it would provide, and some the wisdom and merit of making it at all. The last generation of iPod Nano created a mini craze when some, recognizing the size and form similarity, popped it on a wristband; the purported iWatch has been rumored to be a supercharged version of this idea.

I, along with a majority of smartphone users, have completely abandoned wristwatches. Wearing one was never comfortable (I don’t care for any adornment, be it watch or jewelry) and the functionality of a smartphone made it completely redundant; the date, time, and a whole lot more was already available via a device I was carrying, why duplicate it with a device I don’t really want to wear?

Enter the rumor du jour (thankfully replacing the tired Apple television talk). There are a lot of possible technologies that could add enough value to such a device as to overcome even my dislike for wearing watches. Curved glass offering a more aesthetically pleasing device that fits the shape of the wrist, seamless integration with its parent iPhone (or other Apple device), full touch screen functionality thanks to a complete iOS installation, reliance on the more powerful Airplay technology rather than Bluetooth (requiring pairing), and Siri control of its parent device are all some of the enticing possibilities that an iWatch could bring. Such a device could be an easy, readily available gateway to your iDevice; no more pulling your iPhone from your pocket or purse to read text messages or updates. It could easily allow interfacing with your device as a Siri proxy, again allowing you to create reminders, send texts or emails, or get audio information quickly and easily when pulling out your iPhone isn’t optimal.

The device could quickly eclipse the category of wristwatch and become a new sort of device altogether, like a minimal version of Fallout’s Pip Boy wrist computer. While I still use my Arkon iPhone Sleeve on a regular basis (instead of a less functional upper arm case), being able to store my iPhone in a more protected location while still having access to important visual information and full control would be extremely useful. Using wired earbuds has always been problematic when carrying the iPhone in an arm sleeve, and a device such as the purported iWatch would provide all the benefit without some of the disadvantages.

If the rumored iWatch could interface with other devices than just an iPhone, it becomes exponentially more valuable. You could have a remote (possibly even Siri-based) for your Apple TV or iTunes library on you at all times, or a way to interact with your MacBook without having to open it.

All of this is wild conjecture; there’s little firm evidence that an iWatch is definitely coming much less chock full of the features I’ve put on my want list, but the idea isn’t far fetched. Apple has a history of creating devices that redefine their category; an iWatch could easily replicate the success that the iPod, iPhone, and iPad have had.

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That rumored cheap iPhone isn’t likely for you

There’s been a lot of talk lately about drastic changes Apple may be making to the iPhone, mostly in the name of staying competitive with their primary rival Android. While the central argument has some logical flaws (chiefly that Apple isn’t competing directly with any one operating system, they compete with other handset manufacturers), there is likely some truth to the rumored new iPhone handsets.

Apple has long stated that they have engineered the iPhone to be the perfect size for single hand operation, even with the larger (but no wider) iPhone 5 screen. Many pundits have stated that Apple is losing market share because they have so far refused to enter the ‘phablet’ market (phone/tablet hybrids sporting a screen between 5 and 8 inches). Before the smartphone era handset makers had struggled to make flagship phones smaller; being unencumbered offered value that a smaller form didn’t impinge. Enter the smartphone era sparked by the iPhone, reversing the trend because of the value offered by screen space. Larger screens offered easier interaction with touch screens, easier viewing of media and websites, and more visibility for those that want to make a social/technological statement (oh my god, Becky- look at  her phone! It’s so….BIG.) While the phablet market is a budding one, I’d wager that Apple will stick to their game plan of maximal utility from a uniform factor and not deviate from the screen size of the iPhone 5. A successful phone can only be so large before it becomes cumbersome, and a device that can’t be carried in a pocket is simply too large to be practical for all but a niche market.

Then there’s the rumor of Apple developing an entry-level, less expensive iPhone. It’s been rumored to cut corners that Apple generally doesn’t to contain costs, like regressing from the iPhone 5′s aluminum chassis to a composite plastic one. Originally I didn’t think this concept held any validity, as Apple has never adopted the strategy of offering a loss leader as Amazon does with the Kindle (or to a lesser extent Google does with the Android OS)- offering a product at low to no cost, expecting to generate profit from core businesses that are fed by customers channeled to it from the free/low cost product. While Apple could count on the profit generated by sales via the iTunes App Store, media sales through iTunes, accessories, and kickbacks from cellular providers that subsidize the price of the handsets to lure customers into a long term contract, they to date have not only collected revenue from those sources but also maintained a profit from the sale of the iPhone itself. This is only possible if your product is perceived as a quality good; Android handsets run the gamut from quality to entry level with prices to match. Even Google makes more profit from the iPhone than they do the far larger numbers of Android handsets in use.

So given these factors, what incentive does Apple have to delve into the entry level smartphone market? When you consider my home country’s smartphone market, very little; hence my (and many other’s) dismissal of the rumored cheaper iPhone. Sadly, like many Americans I tend to overlook the rest of the world, and this profoundly impacts the market strategy of a company like Apple looking to maintain their record growth and profits. The largest developing markets for smartphones aren’t in the Americas or Europe, they lie to the East. China is a booming market that Apple has been courting for a few years now, and they’ve had some success with their primary market strategy of premium product brand identity that has served them so well in their home country. While news of the Chinese technological market is news to most of us, it’s old news to technological strategists. India and the rest of Southeast Asia is the new gold rush, but old strategies may not work in these new business environments. Many of these countries lack cell providers willing or even able to offer subsidized handsets in exchange for long term contracts, and customers may be unwilling to accept them. In such markets you simply purchase your handset and pay as you go, and in markets such as this a $650 unsubsidized iPhone (the actual out of pocket cost of the cheapest iPhone 5) simply isn’t an option. For a company looking to enter a market, sometimes it’s best to conform to market standards rather than stoically stay the course. In such a situation a lower-cost iPhone makes perfect sense; while it may not generate the same profit as the handset does in my homeland’s market, it could very well do so in another or at least offer Apple a chance to gain a foothold in a rapidly developing market. One look at the history of consumer electronics shows the fate of those that move too slowly: the Zune was a fine digital audio device, but by the time it hit the market it was already passé. Apple cannot hope to maintain their meteoric growth in Western markets; we have already come close to smartphone saturation, with only the lower income demographics and niche markets left unplumbed (but already well targeted by inexpensive entry-level Android handsets). I’d go so far as to argue that catering to these markets is one of the reasons Android users as a whole have been found to use their devices less for non-telephone tasks like browsing and spend far less on apps and accessories; they simply have less use for smart devices and less money to spend. The market numbers are impressive when overall numbers of handsets are considered, but market share is meaningless if you aren’t generating adequate revenue from it.

So considering this, it is more than possible Apple may release a less expensive ‘new’ iPhone (rather than their entry-level strategy in existing markets of offering older models at a discounted price). Sadly for bargain hunters, these low cost iPhones may never be aimed at US or European consumers.

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A discount iPhone?

We are in the dark period between hardware releases for Apple, so rumors abound as to what’s to be released in the near future. The speculation has been fanned by Apple’s recent financial reports- although Apple is awash in cash and has generated an astounding $13.07 billion in revenue in just the first quarter of the fiscal year, the sales figures didn’t match what financial pundits had predicted based on Apple’s meteoric rise in sales and revenue over the past few years. Consequently Apple’s stock price took a tumble (that was soon reversed) thanks to the pessimism. What’s a consumer to think? Has Apple really run out of mojo? Is this just a return to reality for a company that’s feasted off of meteoric sales fueled by practically creating two new product categories?

There are multiple factors in play concerning, and most are not readily evident. While the iPhone still reigns supreme in the US, it isn’t the industry leader around the world- Android has the lion’s portion of market share thanks to its breadth of pricing, handsets, and the slow release of the iPhone around the world. Apple has had some significant success in China, the world’s largest market for handsets, but they currently rank 6th in market share.

The iPhone won’t likely retain its market dominance in the US forever as competitors flood the market; Android has evolved at a blistering pace, and Microsoft is pushing their new mobile version of Windows 8 just as new names like Ubuntu and Firefox have been linked to mobile devices. What some don’t realize is that Apple has never been focused on market share- they place far more value on margin. Organizations like Amazon and Google sell their devices with almost no profit (and sometimes at a loss) to steer customers to their real profit centers- advertising and data mining for Google, the various Amazon stores for that entity. While Apple does generate a tidy profit from their media and app stores, they have never embraced the strategy of employing a loss leader (something that generates no or negative profit that brings more customers to the things that do).

The breadth of Android devices has been recognized as one if the reasons the platform has such a commanding portion of the handset market; devices range from iPhone equivalents like the Samsung Galaxy line to bargain models from makers like Huawei. While Apple does keep older models of iPhone in production to offer a broader range of prices, they have never sold a handset that was designed to appeal to bargain hunters (or a device that deviated from the established form factor). Some (including former Apple CEO John Sculley) have called for Apple to deviate from their business model to compete in the inexpensive handset demographic, even going so far as to insist that a cheaper version of the iPhone must be pending (with no actual evidence to support the claim). Others report on a rumored handset dubbed the iPhone Math that sports a 4.8 inch screen similar to some of Samsung’s phone/tablet (“phablet”?) hybrids.

Not only is such action not likely to happen, it would border on foolishness for Apple to do so. They have managed to generate more profit than all of their competitors combined by not focusing on market share and ceding certain segments of the market. While the sales figures from this past fiscal year weren’t explosive, they were still greater than the GDP of many countries- and this was in a quarter that was one week shorter than usual. Apple has only developed products to that offer significant value in each category, not devices solely to compete for money in that category. The Mac Mini is more than a cheaper version of the iMac; it has a different form factor and possible uses. The iPad Mini is less expensive than the full sized iPad, but the primary focus hasn’t been the price, it has been the utility offered by the smaller size of the device. The same can be said for the Shuffle, Apple’s cheapest iPod; it has a significantly different form (diminutive and lacking a screen) but is tailored for specific uses, not just to generate sales in those that can’t afford an iPod Nano or Touch. Creating an underpowered or under spec-ed device just to compete in a market segment they have never pursued for little more than market share is nonsense unless there were some way they could keep the profit margins they count on, and to date none of their competitors have been able to do so with far more time and emphasis on that demographic.

As for the super sized iPhone Math, the waters are less clear but still doubtful. I have no doubt there is a larger sized iPhone in product research (just perusing the research models revealed during the Apple v Samsung trials recently shows how broad the scope can be) but Apple tends to control every aspect of their consumer product line. The screen resolution of a larger device would pose problems for apps; it would either have to sport a non-retina display (unlikely considering the flack generated over the lack of retina in the iPad Mini) or would have to have a custom resolution- very unlikely given Apple’s insistence on uniformity in App Store apps. Another facet is Apple’s own in-house research; they have reported more than once that the screen of the iPhone and iPod Touch was specifically designed to allow one handed operation. The iPhone 5 allegedly is the largest factor that can still adhere to this purpose according to their engineers, any larger and Apple would have to ignore their own stated strategy. Then there’s the question of product identity; a massive iPhone becomes a potential competitor to the iPad Mini (which has allegedly already cannibalized sales from its full sized sibling).

While I’m far too low on the technosphere’s food chain to have precise insight on Apple’s product development, I’d still wager a week’s pay that a majority of the hand wringing and speculation on what they will (or should) do is just so much noise. The next big thing won’t be a big iPhone, it will likely be an entirely new category of device.

 

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The next wave of devices

For those of you that haven’t been keeping up with the Apple rumor mill, there’s big news brewing. Several sources have confirmed a September 12th Apple media event to announce the release of the next wave of devices from Cupertino. The only question is what are the devices that will be launched?

The device most likely to be talked about is the next generation of iPhone. Whether it’s the New iPhone or iPhone 5, we’ve had too many bits of evidence for it not to be close to being in the hands of consumers. We know some likely aspects: a larger screen, LTE integration, and some changes that will make accessory manufacturers cringe like a new, smaller sync port and the headphone jack being moved to the bottom.

There is strong evidence for a refreshed line of iPods as well. The iPod Touch is likely to be updated to take advantage of the production lines of the new iPhone. The iPod Nano is believed to have been reconfigured too; the updated chassis will look like a shrunken iPod Touch instead of its current quirky square form.

The last strong possibility is the long-rumored iPad Mini. The form is said to be identical to the existing iPad, just shrunken from 9.7 to 7.8 inches. The smaller tablet form factor has been shown to be a viable niche (contrary to the opinion of the late Mr. Jobs) and Apple would be negligent to leave the Nexus, Kindle Fire, and Nook Color unchallenged. No word yet on exact prices or construction; Google sells the Nexus at or just below cost, something Apple has had no interest in doing to date so I’d wager the starting price to be slightly more than the Nexus’ $199.

There are some not-so-likely devices that have been bandied about the rumor mill  as well. The Apple-produced television has been talked about for some time, but there has been no concrete evidence that such a device is even close to manufacture (if it will be made at all). Google is still attempting to gain traction with their Google TV line of set top boxes and integrated television sets made by partner firms, but to date it hasn’t been embraced by consumers. The Apple TV has sold respectably well for a device dubbed as a “hobby”, but it’s a big leap from making the diminutive input device to a full fledged TV set.

Lastly there’s the not-so-widely rumored changes to the Apple TV itself. Some have stated that Apple could make the Apple TV a competitor to lower-end gaming platforms like Nintendo’s Wii if they added Bluetooth and the ability to run iOS apps on the device. Access to the App Store would also open up a world of new content to the device, from TV shows via Hulu or streaming video from HBO Go or other provider-specific apps. While AirPlay provides a way to enjoy these services over an Apple TV now, a second device to push content is required; having native apps on the Apple TV would be a boon. The devices already runs a limited version of iOS and contains the same system-on-a-chip internals as other iOS devices, so the leap isn’t unreasonable even it if is unexpected.

I for one am rabidly anticipating getting a new iPhone (my current iPhone 4 has been a great handset, but I’m ready to upgrade). Thanks partially to AT&T’s two year contracts I held off upgrading to the iPhone 4S (the second ‘S’ version I’ve skipped). While I see the benefit of an iPad Mini, I doubt I’ll be buying one unless I have a couple hundred dollars lounging about with nothing else to spend it on. The smaller size would make it easier to hold in one hand and might be a bit better for personal media consumption, but I can’t see replacing my current iPad with one. The smaller form wouldn’t mesh as well with Bluetooth keyboards (like my current ZaggFolio case) and the extra screen space is handy when working with something like iWork Apps.

No matter what iOS device you prefer, you’re likely going to have some decisions to make come September. Start saving those spare coins now, the latest and shiniest doesn’t come cheap!

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More rumors of an iPad Mini

For some time now pundits and various rumor sites have been murmuring about a secret smaller iPad Apple has been developing to compete in the budding smaller, less expensive tablet market. Dubbed the ‘iPad Mini‘, the only thing that the rumors agree on is that the tablet would come with a 7 inch screen (as opposed to the existing iPad’s 9.7 inch screen) similar in size to Amazon’s Kindle or the new Google Nexus 7. The smaller device would likely still sport a version of Apple’s Retina display, but be somewhat less powerful than its larger sibling allowing Apple to meet the $199 price that many of the devices in this category have.

The latest rumors come to us from Bloomberg via MacRumors. Bloomberg argues that competitors haven’t been able to compete head to head with Apple, but they have found some traction selling devices that are smaller and easier to carry. The Kindle Fire and Nook Color were the first big names sporting this form, and the Fire had respectable sales figures during its first year in production (although those numbers have tailed off significantly as of late). Google’s Nexus aims at this new subcategory, with a matching seven inch screen that could more easily be held in one hand or stowed in a purse or large pocket.

Apple, thanks to strong strategic positioning and manufacturing has been able to sell the iPad at the same price point for each generation, yet still generate a profit of close to two hundred dollars for even the lowest priced model. They compound this profit by the sales from their ancillary services: the App Store, iTunes music and video, iBooks, and direct sales of accessories. Google is selling their new Nexus 7 at or possibly below cost as a loss leader, hoping to generate profit by channeling users to their core business of advertising and new multimedia retail site Google Play. It’s not unreasonable to expect that Apple could leverage their current manufacturing might to crank out a smaller, less expensive iPad that could still generate a profit via sales of the device that would still offer the same secondary sales that the current iPad does. This would also provide a competitive advantage over Microsoft’s soon-to-be-released Surface lineup. Apple would have devices with a more complete ecosystem, more mature app store, more accessories, and with the addition of a Mini tablet less expensive models as well (although the iPad is likely to be less expensive than the x86 model of Surface running a full version of Windows 8; they have been stated to be priced to compete with ultra books that range from $800-$1600). The iPad Mini would steal all market buzz from the newly-released Google Nexus, as well. Google needs to have a sizable market presence for the Nexus 7 to be financially worthwhile, but a similarly priced and formed iPad would likely garner more attention and sales.

There are some valid reasons that Apple would decide not to bring a seven inch tablet to market. Such a device would likely cannibalize sales from existing iPads more than competing tablets. The smaller tablet would run the risk of fragmentizing iTunes apps, as they could require different resolutions and icons between the those of the iPhone/iPod Touch and existing iPad. Steve Jobs went on record more than once panning the seven inch form for tablets, pointing out that there isn’t enough differentiation between them and smartphones. While devices with a seven inch screen have been spotted in the wild, Apple routinely field tests devices that never make it to market.

I fall on the side of approving of the smaller form factor. While I wouldn’t likely buy one, I do like the size of the seven inch tablets I’ve tested; they fit one hand comfortably but offer enough extra screen and case size (think larger battery) to offer consumers some unique value. The Bloomberg report suggests that the Mini iPad would sport the same screen resolution as the Retina iPad (1024×768 pixels) eliminating the fear of fragmentation, and could take the place of the iPad 2 as Apple’s less expensive tablet. I have little doubt that Apple could sell the smaller iPad for $199, the question is can they do so without sacrificing performance or features while generating enough profit to make the move worthwhile?

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The next Apple iPhone strategic change

My friends at MobileFun.co.UK have released some images and information concerning the next generation of iPhone; rumored to be coming in early Fall. The images solidify some longstanding rumors like a larger 4″ screen, and hint at some cosmetic changes that may rankle the masses of accessory manufacturers that make a living from Apple’s ecosystem.
One change is relocating the headphone jack. All of the prior models of iPhone have the headphone jack located in the same spot- on the left top rim of the device. According to the schematics revealed by MobileFun the jack will be moved to the bottom of the iPhone, similar to the location of the iPod Nano’s headphone jack location. The movie is a curious one; the only educated guess that came to me was that the move was necessitated by internal component changes, whether it be different shaped boards or increased sizes. The change could impact some devices that only charge the device and require access to the headphone jack for audio, like a car cradle.
The other obvious change is the abandonment of the iconic 32 pin connector that has been the mainstay of all Apple mobile devices save the tiny Shuffle. The new connector appears to have a much smaller footprint; other reports have suggested that it relies on a 19 pin connection. The risk here is obvious; it makes all existing accessories that use the current 32 pin connection obsolete, forcing developers to reconfigure their products or rely on an adaptor that may not offer as much functionality (in addition to power and data the 32 pin connector can act as limited structural support, keeping the iOS device in place as it sits on the accessory).
This change like the headphone jack is likely required by changing internal components. The smaller input frees up both internal and external space, but could offer an additional competitive advantage: magsafe connectivity. The cord could stay connected in a fashion similar to Apple’s patented magsafe power cords for their MacBook lineup, offering the same protection from the device being damaged by cord pulls (with the iPhone’s much lighter weight a quick tug on the sync cable could send the device flying).
Both changes are a bit of a gambit; each has to offer some distinct value to users in order to be embraced. Both are a challenge to accessory manufacturers; while product lines would need to be altered it could spur additional sales as the new iPhone (and any other iOS devices) with the smaller connection became widespread.

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Apple Quietly Pushing the Post-Desktop Era?

With the introduction of the iPad Steve Jobs announced the beginning of what he dubbed the “Post-PC” era; a phase of computing in which a full form computer was no longer the focus of all activity. His words have proven to be accurate as iPad sales have skyrocketed and competitors have scrambled to try to bring viable products to market. The iPad has practically killed the once-touted netbook, and with the right accessory for the task there’s little the iPad can’t do as well as a laptop.

There’s another, quieter trend evident in what was omitted from Apple’s recent WWDC Keynote- there was no coverage of Apple’s desktop line, not even the recently upgraded (albeit modestly) Mac Pro. Is Apple killing off yet another icon of computing?

Only time will tell, but intuitively I think the answer is both Yes and No. There are undeniably some tasks that are best suited for a desktop environment, ones that require more screen real estate, more varied inputs (camera, scanner, specialized audio equipment, etc.), better sound output, additional storage capacity and so on. The MacBook lineup provides powerful architecture to rival most desktop towers (even the latest MacBook Air has some muscle with its i5 and i7 “Ivy Bridge” processors), but how can they compete with the screen of the iMac? The answer lies in two new Apple offerings.

The first is the Thunderbolt port included in all new Macs. The new portal offers the fastest input and output speeds available and is fully bidirectional, providing a virtual two-lane highway for simultaneous inbound and outbound data. Apple is releasing a number of adaptors for Thunderbolt: ethernet (the new MacBooks lack a dedicated ethernet port), VGA, DVI, HDMI, even Mini Display Port. These last few provide a perfect way for all MacBooks, even the diminutive 11″ Air, to take advantage of whatever size display your heart desires. The Mac lineup is capable of running in “clamshell mode”, meaning they can closed and in effect operate as an ultra-thin PC tower. Should you need dual monitors just run your laptop with both the external and built-in display simultaneously. The MacBook’s Bluetooth offers an easy way to accessorize inputs, whether you need a full-sized keyboard or gaming mouse.

The second is Apple’s Thunderbolt Display. While you can use any monitor for extra screen space, the Thunderbolt Display doesn’t need an adaptor and provides some extra functionality- three USB 2 ports, a FireWire 800, gigabit ethernet, and an additional Thunderbolt Port so that you can daisy chain any other Thunderbolt accessories. The display also features Apple’s iSight camera and 2.1 speakers, further mimicking the functionality of an iMac. As with all other Apple products, the Thunderbolt Display was designed to work seamlessly with Macs: the Thunderbolt cable divides to include a magsafe power input so that one cord provides all the connection your MacBook needs. Toss in a stand like the Twelve South’s BookArc and you have all the benefits of a desktop with the ability to go portable at a moment’s notice.

Much like the optical drive, I don’t expect Apple to rush to the discontinuing of a platform that is still in demand. Instead, you’ll likely see the gradual transition from the existing to what Apple considers to be the future, much like their slow abandonment of traditional hard drives in favor of solid state ones. While the MacBook lineup can’t quite compete yet with desktops for graphical muscle, that may be changing soon too. The tech specs of Apple’s new Retina Display MacBook Pro (the base model has a quad core i7 processor, eight gigabytes of ultrafast RAM, and dual integrated Intel HD 4000 (for less intensive, power-saving rendering) and NVIDIA GeForce GT 650M hardware graphics with 1 gigabyte of memory (for when you need some serious muscle) rival all but the most powerful consumer desktops.

While I love my current iMac (easily the best desktop I’ve owned), I may follow Apple’s vision when the day comes to upgrade. My trusty iPad handles portable computing tasks like a champ, but there are times I’d love to be able to take my Steam game library with me. The combination of Thunderbolt Display and MacBook Pro are a very tempting duo, bank account permitting.

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