Archive for January, 2010

The iPad Is The Gadget We Never Knew We Needed


Now that we’ve seen the iPad in the light of day, there’s a lot of chatter about what it can’t do. But Apple is now a massive threat to netbooks and ebook readers. Here’s why:

Generally speaking, the iPad’s goal is not to replace your netbook, assuming you own and love one. It’s not about replacing your Kindle either, assuming you cashed in for that as well. We have reviewed plenty of both, and know there’s plenty to like. If you derive pleasure out of using either, then Apple might have a hard time convincing you to switch to the iPad. But for the millions of people who aren’t on either bandwagon, yet have the money and interest in a “third” device between the phone and the computer, the iPad will have greater appeal.

250 Million iPods Earlier…

When the first iPod came out, its goal was not to grab the customers who Creative and Archos were fighting over, with their dueling 6GB “jukeboxes.” It was to grab everyone else. I remember listening to arguments about why Archos had a better device than Creative or even Apple. Lot of good that early-adopter love got them in the long run. The pocket media player market exploded, with Apple eating over half the pie consistently for almost a decade.

When the iPhone came out, BlackBerry users were like, “No flippin’ way.” And guess what, those people still buy BlackBerries. (And why shouldn’t they? Today’s BlackBerry is still great, and hardly distinguishable from the BB of 2007.) The point is, the iPhone wasn’t designed to win the hearts and minds of people who already knew their way around a smartphone. It came to convince people walking around with Samsung and LG flip phones that there was more to life. And it worked.

iPhones now account for more than half of AT&T’s phone sales. You can bet that WinMo, Palm and BB combined weren’t doing that kind of share pre-iPhone. Globally, the smartphone business grew from a niche thing for people in suits to being a 180-million unit per year business, says Gartner, eclipsing the entire notebook business—about 20% of which, I might add, are netbooks. The iPhone isn’t the sole driver of this growth, of course, but its popularity has opened many new doors for the category. Just ask anyone in the business of developing/marketing/selling Droids or Palm Pres.

You could say, “Those were Apple’s successes, what about their failures?” In the second age of Steve Jobs, there aren’t a whole lot. Apple TV is the standout—quite possibly because Apple discovered, after releasing the product, that there wasn’t a big enough market for it, or any of its competitors. Apple TV may be crowded out by connected Blu-ray players, home-theater PCs and HD video players, but Apple TV’s niche is, to this day, almost frustratingly unique.

So how do you know if a market exists? You ask the “other” Steve, Microsoft CEO Steve Ballmer.

It’s Business Time

There’s a famous Ballmerism, one he’s even said to me, that goes something like, “A business isn’t worth entering unless the sales potential is 50 million units or more.” 50 million. That’s why Ballmer is happy to go into the portable media player business and the game console business, but laughs about ebook readers. Microsoft may not sell 50 million Zunes, but it’s worth being a contender.

You can bet Apple thinks this way. You can easily argue that, despite its sheen of innovation, Apple is far more conservative than Microsoft. Apple TV is a bit of an anomaly, but with no major hardware refreshes and a few small-minded software updates, you can hardly accuse Apple of throwing good money after bad. Presumably Apple TV was a learning experience for Jobs & Co., one they’re not likely to repeat.

With that in mind, let’s look particularly at netbooks and ebook readers.

Like Notebooks, Only Littler

Netbooks are cooking, but it’s well known they’re cooking because notebooks are not. A netbook was originally conceived as something miraculously small and simple, running Linux with a warm fuzzy interface that dear old gran could use to bone up on pinochle before Friday’s showdown with the Rosenfelds. But instead of growing outward to this new audience (always with the grandmothers, it seems), it grew inward, cannibalizing real PC sales.

The Linux fell away, mostly because it was ill-conceived, and these simply became tiny, cheap, limited-function Windows PCs. They may have been a 40-million-unit business last year, according to DisplaySearch, but they only got cheaper, and the rest of the business was so depressed nobody was happy. (And just ask Ballmer how much he makes on those XP licenses, or even the “low-powered OS” that is Windows 7 Starter.)

Point is, nerds may love their netbooks, but the market that the netbook originally set out to reach is too far away, running farther away and screaming louder with every blog post about what chipset and graphics processor a netbook is rumored to have, or whether or not it is, indeed, a netbook at all. Clearly the audience is cheap geeks, and while that may be a good market to be in (just read Giz comments), it’s definitively not Steve Jobs’ market.

Easy on the Eyes

Now, about that Kindle. Best ebook reader out there. Every time we say that, we say it with a wink. We totally respect the Kindle (and I for one have hopes for Nook once it pulls itself out of the firmware mess it’s in), but we think e-ink is a limited medium.

Its functionality is ideal for a very specific task—simulating printed words on paper—and for that I have always sung its praise. The Kindle is ideal for delivering and serving up those kinds of books, and as a voracious reader of those kinds of books, I am grateful for its existence. But there are other kinds of books of which I am a consumer: Cookbooks, children’s books and comic books. (Notice, they all end in “book.”) The Kindle can’t do any of those categories well at all, because they are highly graphical. E-ink’s slow-refreshing, difficult-to-resize grayscale images are pretty much hideous. No big deal for the compleat Dickens, but too feeble to take on my dog-eared, saffron-stained Best-Ever Curry Cookbook.

So, e-ink’s known weaknesses aside, let’s talk again about Ballmer’s favorite number, 50 million. Guess how many Kindles are estimated to have been sold ever since the very first one launched? 2.5 million. Nobody knows for sure because Amazon won’t release the actual figures. Guess how many ebook readers are supposedly going to sell this year, according to Forrester? Roughly 6 million. In a year. Compare that to 21 million iPods sold last quarter, along with 9 million iPhones.

I am not suggesting that the iPod or iPhone is a worthwhile replacement for reading, but I am saying that, for better or worse, there are probably at least 2.5 million iPod or iPhone users who read books on those devices.

Are you starting to see the larger picture here? I am not trying to convince you to buy an Apple iPad, I am trying to explain to you why you probably will anyway. As the Kindle fights just to differentiate itself while drowning in a milk-white e-ink sea of God-awful knockoffs, you’ll see that color screen shining in the distance.

Sure the iPad may not be as easy on the eyes as a Kindle. But you will be able to read in bed without an additional light source. You will be able to read things online without banging your head against a wall to get to the right page. And, once the publishers get their acts together, you will be able to enjoy comics, cookbooks, and children’s books, with colorful images. Even before you set them into motion, dancing around the screen, they’ll look way better than they would on e-ink. (I haven’t even mentioned magazines, but once that biz figures out what to do with this thing, they will make it work, because they need color screens, preferably touchscreens.)

Tide Rollin’ In

So we have this new device, carefully planned by a company with a unique ability to reach new markets. And we have two types of products that have effectively failed to reach those markets. And you’re going to bet on the failures? The iPad has shortcomings, but they only betray Apple’s caution, just like what happened with iPhone No. 1. Now every 15-year-old kid asks for an iPhone, and the ones that don’t get them get iPod Touches.

We can sit here in our geeky little dorkosphere arguing about it all day, but as much as Apple clearly enjoys our participation, the people Jobs wants to sell this to don’t read our rants. They can’t even understand them. My step-mother refuses to touch computers, but nowadays checks email, reads newspapers and plays Solitaire on an iPod Touch, after basically picking it up by accident one day. That’s a future iPad user if I ever saw one.

Jobs doesn’t care about the netbook business, or the ebook business. He’s just aiming for the same people they were aiming at. The difference is, he’s going to reach them. And the fight will be with whoever enters into the tablet business with him. Paging Mr. Ballmer…

PS – If I’ve gotten to the end of this lengthy piece without telling you much about the iPad at all, it’s because other Giz staffers have already done such a handsome job of that already. If you missed out, here are the best four links to get you up to speed:

Apple iPad: Everything You Need To Know

Apple iPad First Hands On

Apple iPad Just Tried to Assassinate Laptops

8 Things That Suck About Apple iPad

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Thursday, January 28th, 2010 digital No Comments


500x apple revenue by segment Apple watchers can now see how truly huge the company’s iPhone business has become, thanks to a new accounting method the company started using this past quarter.

thumb160x 40b73624ed47a836c6882a101c6c7e92 In less than three years, the iPhone has grown to become Apple’s biggest business—up from zero.

Specifically, during Apple’s December quarter, the company reported $5.6 billion of iPhone-related revenue, up 90% year-over-year. That edged out the Mac business ($4.5 billion) and iPod business ($3.4 billion) for the second quarter in a row and the third time ever. It was the first time the iPhone has beat the Mac and iPod businesses by more than $1 billion each.

And this despite Apple missing Wall Street’s expectations for iPhone sales, thanks to increased competition from Google Android and other smartphones.

Why the new visibility? During the quarter, Apple started taking advantage of new accounting rules that lets it report the vast majority of revenue from iPhones and Apple TV devices immediately. Previously, it had to spread the revenue over 24 months to account for free software updates it would offer those customers.

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Tuesday, January 26th, 2010 digital No Comments


500x chart of the day children mobile phones More kids are getting mobile phones: Last year, more than 35% of U.S. children ages 10-11 had cellphones, almost double the amount in 2005, according to Mediamark data, via eMarketer. And more than 5% of 6-7-year-olds had cellphones last year.

logo tbi Takeaway: The audience for kids-focused mobile content, apps, and advertising is growing rapidly.

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Tuesday, January 19th, 2010 digital No Comments


500x wiimedical Another day, another story about some cheap, plastic Wii motion control accessory finding an application outside of gaming. In this case, it’s the balance board, and not only is this device helping stroke victims recover, it’s saving them money, too.

In fact, doctors at the University of Melbourne found that the balance board, normally used for pseudo Yoga or navigating Mii’s down a virtual ski slope, was so sensitive it could very well replace traditional laboratory-grade “force platforms” doctors use to assess a patient’s balance.

When doctors disassembled the board, they found the accelerometers and strain gauges to be of “excellent” quality. “I was shocked given the price: it was an extremely impressive strain gauge set-up,” said lead researcher Ross Clark, in an interview with New Scientist.

Even better, Clark’s team has already published a paper that verifies the Wii balance board is “clinically comparable” to the nearly $18,000 lab force platform. That’s great news for many smaller physio clinics that would otherwise be unable to afford the traditional rig. [New Scientist]

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Sunday, January 17th, 2010 digital No Comments


500x sai chart yahoo bing Since Microsoft’s Bing search engine launched last summer, it has gained market share at the expense of Yahoo. If the trends stay consistent, Bing could pass Yahoo in the U.S. by the end of November.

To be sure, some (most?) of Microsoft’s gains have come with an expense: The company is buying up toolbar deals to become the default search engine for more users — less-valuable, paid traffic that Yahoo seems happy to give up. And Microsoft has spent a lot of money advertising Bing.

But there’s no doubt that Yahoo’s declining search business, long term, is bad news for the company. Especially because its deal to farm out its search technology to Bing will only generate revenue for searches conducted through Yahoo, not through Bing, even though Yahoo is selling the ads on Bing.

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Friday, January 15th, 2010 digital No Comments

Billionaire Earnings Fight! [Movies]


500x avatarvsmodernwarfare Billionaire Earnings Fight! [Movies]Avatar, the soon king of movies, vs Modern Warfare 2, the king of videogames. Here’s a look at how their earnings stack up by the numbers. The biggest surprise? Modern Warfare had a significantly larger ad budget. [Business Management]

 Billionaire Earnings Fight! [Movies]
 Billionaire Earnings Fight! [Movies]

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Friday, January 15th, 2010 digital No Comments

The numbers vary depending on who you ask or whose data you use

Bing search volume continues to drop despite tons of ads and cheating — redirecting traffic from,,, and windows search (see also – .

January 13, 2010

The Nielsen Company today reported December 2009 data for the top U.S. Search Providers.

MegaView Search data – including total searches, unique searchers, search share, and all other search figures – cannot be trended with search results prior to October 2009 due to recent methodology changes.


Searches represent the total number of queries conducted at the provider. Example:  An estimated 6.7 billion search queries were conducted at Google Search, representing 67.3 percent of all search queries conducted during the given time period.

versus Oct 2009 numbers from hitwise


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Wednesday, January 13th, 2010 analytics No Comments


500x rise of digitalization If you were ever curious to know how fast our lives are becoming saturated with digital technology, get a load of this graph. In 2004 we were in the kiddie pool and by 2007 we were drowning.

Citing the Census Bureau’s recent Statistical Abstract of the United States, Fast Company notes that an estimated 110 billion text messages were sent on cellphones in December 2008—more than double the previous year. Retail sales also soared from $24 billion when the decade began to $128 billion in 2007.

So where are we now? It’s probably safe to assume that the Cracken has dragged our lifeless corpse to Davy Jones’ locker. [Fast Company]

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Wednesday, January 13th, 2010 digital No Comments


500x go app store r7 We’ve already followed the iPhone money, but this follow-up infographic from GigaOm proves what we suspected all along: the real money’s in apps. [GigaOm]

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Wednesday, January 13th, 2010 digital No Comments

The Damning Data [Nexus One]


500x 55613448 702dde3cadeb6e53ac2035202ea912a7.4b466647 scaled 01 The Damning Data [Nexus One]Google’s Nexus One support forums have been flooded with anecdotes about the phone’s poor 3G connectivity, so one user decided to follow up with some reasonably scientific tests. The conclusion? The Nexus One is kind of terrible at basic cellphonery!

The test was simple and limited, consisting of one dude, user WV, wandering in and out of his house, recording signal strength as measured in dBm and ASU with Android’s built-in metering app. Assuming the Nexus One is supposed to work like a normal cellphones—that is, it connects to 3G networks when they’re available and EDGE only when they’re not—something’s wrong.
500x screencap 2010 01 11 at 9.07.03 am The Damning Data [Nexus One]
Since the phone is obviously finding and receiving the cellular signals just fine, but not handling them as you’d expect, randomly flipping between the two—and evidently preferring EDGE most of the time—no matter how strong its signal is. This points to a software issue, not a hardware issue. That, and this:

OK. I found “Phone Info” screen through “Any Cut”. This looks like a screen not intended for average users. It clearly has settings that should not be messed with. However, it does have a pull down menu that was set to “WCDMA Preferred”. I changed this to “WCDMA Only”. The phone reset, and never a! gain saw the f’ing “E” on the signal indicator- ALL 3G. After about 1/2 hour of speed tests (150k – 800kbps) and google satellite map downloads (all definitely faster), I switched back to “WCDMA Preferred”. Guess what? After a few minutes, I was back on EDGE, even with a good signal. Switched back to “WCDMA Only”, and 3G it remains.

This doesn’t fully solve the problem, because as WV notes, if you fall out of T-Mobile’s 3G coverage area with EDGE disabled, you’re basically boned. But anyway, yes, this appears to be a software bug. Or, if you’re feeling conspiratorial today, like WV, a software feature:

My concern is whether T-mobile is being sneaky about this and purposefully dumbing down the 3G to Edge to reduce cell frequency congestion and/or their back-end network congestion.

I’m not sure I want to draw that nexus (haw?) quite yet, since the issue was first brought to light by comparing the Nexus One’s 3G/EDGE handling to other T-Mobile 3G Android handsets, and those, despite having the same data-sucking potential as the Google Phone, haven’t been throttled in any way. While Google and T-Mobile say they’re “investigating,” the evidence keeps mounting and the question looms larger: what’s really wrong with the Nexus One’s 3G? [Google Nexus One Support Forums]

 The Damning Data [Nexus One]
 The Damning Data [Nexus One]

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Monday, January 11th, 2010 digital No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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