One more Speculation

Much will be clearer to us on October 4th, but let us pause a moment and wildly speculate about what’s happening behind the scenes.

Amazon revealed their new touch-enabled Kindles as well as an Android-based 7″ tabled, called the “Fire”. Steve Jobs personally always poo-poo’ed the notion of anything smaller than the iPad form factor, the new device is generally seen to be a frontend to the “Amazon Cloud”, that is the heaven Amazon.com will be in when users let themselves be locked into the Amazon ecosystem versus the iTunes one.

On Fire

About the only advantage that the Kindle had over the iPad was to be readable in bright sunlight, like you would find next to a pool. While the new Kindle Touch retains that at a cutthroat price, the Kindle fire is aimed squarely at Apple’s well established mobile business model. They even go as far as selling the device at roughly what it costs to make it, the difference can easily be made up in media consumption. Because once you are submitting yourself to Amazon’s dictatorship you CAN only get apps from the Amazon App Store, books from the Kindle store, Movies from Amazon Instant.

“Wait, Apple has been doing that too!” you might exclaim, and you are right. However we find that Apple has mellowed quite a bit and listens attentively (at least more often than not) to developers and publishers on their platform. Apple has achieved a level of market dominance that it can afford to act as a “benevolent dictator”, whereas Amazon is still only evil.

Thankfully the Fire is nothing earth-shattering. It’s just an Amazon-skinned Android tablet with mediocre specs. 1024×600 pixels, like you would have seen it in 3-year old netbooks, squeezed into a 7″ form factor. Yeah, it’s IPS (in plane switching) LCD – just like the iPad – but gone is the advantage of being able to read that on the beech. Well, you’d get skin cancer from that anyway.

The Kindle operates on the same model as razors and blades. You – more or less – give away the hardware and make a killing on the content. And much more so than Apple, because Amazon is unscrupulous when it comes to mining your purchase history for unearthing cat nips to present to you. “you might also like…”

Actually the one-click purchase system that we see on the desktop in iTunes was originally licensed by Apple from Amazon because they hold a patent on it. To avoid children from maxing out their parent’s credit cards Apple has since introduced the necessity to re-enter your iTunes password. Can we predict that Amazon will feature 1-click on the Fire as well? How soon will Fire users clamor that they need a usable method to limit their youngster’s purchases?

Facebook

If you know where to look you can see that Apple actually made a broader push to include social networking systems on an OS level. Right now the only system integrated that deeply with the OS is Twitter. But clearly there’s the groundwork to add Facebook in there as well.

Which brings us to the mysterious absence of the Facbook iPad app. In the Kindle fire presentation there was a Facebook icon visible on the dashboard. Mark Zuckerberg is clearly aware that tablets are the next big market for Facebook. But in order to insure market dominace – and to alleviate a bit of Twitter-envy – Facebook also needs to be integrated on the system level, obsoleting the need for a plethora of third-party wrappers and APIs to talk to the Facebook web API.

By the same token Apple is aware what their uses want and so they are open to the idea of integrating Facebook. They actually tried that previously to integrate PING with Facebook, but for Zuckerberg this was no wide enough a cooperation. Steve Jobs mentioned “onorous terms” to the question why the collaboration did not come to pass. Facebook wanted more than “just PING”.

We can assume that the two companies have been locked into fierce negotiations since at least beginning of 2011. When the Facebook universal app was done in early summer they held it back as a bargaining chip. Probably trying to compell Apple to include Facebook on the system level in iOS 5. Apple in reverse has been dangling this possibility in front of Zuckerberg’s nose ever since the engineers decided on the social media push for iOS 5.

Keeping their options open Facebook also partnered with Amazon to have a tablet client available on the Fire as soon as it launches. Amazon might even have paid for or offered other incentives to Facebook to hold back an announcement of theirs benefitting the iPad platform.

This internal haggling might find an end on October 4th. Rumors say that the iPad client will be unveiled then and I predict we will see Facebook iOS integration as soon as iOS 5.1.

Let’s Talk iPhone

Apple did not unveil the next generation iPhone hardware on WWDC for several strategic reasons. The most important one that it will be the way how millions of new people will use it to sign up for iCloud. If you turn on your new iPhone 5 you get asked to sign in or sign up to iCloud. Nothing is more insuring high sign-up numbers than coupling it with the extasy of holding a new iPhone in your hands.

iCloud is only free in the most basic mode with 5 GB storage. Any other size comes with a subscription cost. So it is basically a numbers game. Some mathematicion in Cupertino made a simple calculation: What percentage do we think would upgrade to more storage? How many sign ups do we get with a combined launch versus launching an iOS 4-based iPhone 5 and then offering a free upgrade with optional iCloud?

Apple is a business after all, even though it tries to delight the user first and foremost. But happy customers are paying customers, right? iCloud will be yet another stream of income offsetting the cost for their massive new datacenter. Oh and since content that you purchased from Apple does not count to your quota, you might as well buy MORE of it.

Let’s have a look at the invitation to the event. The calendar icon spells out the date of the event. The clock tells the time. The maps app shows Apple’s headquarters. And the phone Icon shows one waiting message.

ONE WAITING MESSAGE … as in “one more thing”. Or as in: “we tried to reach you, but missed you. But if you are ready now then you can listen to the message at your convenience”. I think that this puts the blame for the iCloud/iPhone delay squarely on the market’s shoulders. Somehow we just have not been “ready to receive” until now.

But maybe that’s reading too much into it.

What’s odd though is that Apple set up the event at their headquarters as opposed to in the usual location in San Francisco. Also you could see than only very select members of the press have received the invitation, simply because of the limited space available.

There are some more hidden messages in the invitation. The title “Let’s talk iPhone” can suggest two things. At face value it means “Let us talk about the next iPhone”. But when shortening it like this it can also mean “let’s talk about the iPhone concept”. It could mean that Apple really IS merging the iPod touch and iPhone lines as I have elaborated in an earlier post.

Another explanation would be “Let us talk, iPhone”. The next iPhone model is said to feature sufficient oompf to run a speech-enabled assistant on the device. Unlike the assistant-mode on Android where you are limited to 30 seconds at a time and where the speech recognition happens in the Google datacenter.

If Apple really pushes forward with that I am sure that we will also get APIs to speech-enable all our apps. In the future you will be required to also add speech commands to your apps so that users can choose between touch and speech when navigation around your apps.

One more thing might be that Apple now has built up sufficient map material to offer their own turn-based navigation system, a feature that Android had long had a leg up on. Apple purchased a couple of companies in the map business so that they don’t have to license that from Google. If you remember, they told us that the maps from Google are only licensed for MKMapView and the maps.app. How would you like to get turn based navigation features in MKMapView?

By now we know that October 4th will revolve around iPhone hardware and software features. But what about the music player business? The fall has traditionally been the time when Apple unveiled their player lineup for the holiday season. Again, another indication of the looming merge of product lines, wouldn’t you say?

You can play the prediction game as well! Leave your own predictions in the comments and I’ll pick a winner after the event.

Categories: Apple