Both Apple and Google are working to merge the computer world (MAC/PC's/Desktops/Laptops) with the mobile world (Tablets/Smartphones) with iOS and Android/Chrome respectively.  Over the past couple of years, the world has seen the smartphone and tablet market grow rapidly.  At the heart of that growth is three simple factors - mobility, simplicity, convenience.  

In terms of mobility, smartphones and tablets can be taken everywhere, and traditionally, the smaller smartphone more so than the larger tablet.  However, both mobile devices are obviously more portable than a laptop - a factor which has played a large role in their success.  The simplicity of clicking on an icon to check facebook or look at email has also played a huge role.  In fact, one of the major factors in Apple's success of their iOS products is their ease of use.  Finally, most consumers like the convenience of being able to quickly check these things and respond without having to take the time to stop, take out their laptop, and log onto a website.

Laptops/desktops differentiate from tablets/smartphones as the focus is on content creation as opposed to content consumption.  Although there are some apps that let you edit pictures, work on spreadsheets, create presentations, etc. on mobile devices, most people still need the advanced software (Office, Photoshop, etc.) large screen, full keyboard, and mouse functionality.

Finally, we've seen the growth and instant success of "cloud services" through iCloud, SugarSync, Amazon, Dropbox, and others.  The general concept behind the success of cloud services is content availability.  Consumers want to have access to all of their documents, photos, email, music, videos, etc. available on any and all devices that they own.  

The idea of "seamless syncability" of content has made it into mobile devices, and through apps like the aforementioned cloud services companies made it into computers - to a certain extent.  The next logical question is "Why can't computers have both the simplistic interface that smartphones have, yet still be used for more advanced software?"  The answer is "they can".  I believe that Apple and Google agree, which is why they're both interested in bridging that gap.  

Ultimately, we will still continue to have desktop computers and laptops, however, the software running on them will likely change in order to provide consumers the capability to download pictures, work on a spreadsheet, and check email on their home computer, then open up their mobile device and have everything look the same with the same content.

What's after that?  Likely dummy devices - all with web-based operating system - that anyone can log into and immediately pull up their profile, content, and settings.  Similar to what many enterprises have been using for years in "roaming profiles" where multiple employees share office computers.  When they log in, their files, desktop settings, etc. all show up.  Web-based operating systems could do that on a global scale.

There's a lot of buzz today regarding the announcement of the Amazon Kindle Fire 7" tablet.  So as a result, I thought I would discuss the few differences that jumped out at me:

1.    The Amazon is a 7" tablet as opposed to the 10" iPad/iPad 2.

My initial thought regarding the size is that despite the fact that there are several other tablets on the market that are 7" as well, 10" has so far proven to be the size that consumers are looking for in a tablet. 

Several questions come up in this area: 

• Are 7" tablets too close to the size of today's smartphones? 
• Is a 10" tablet simply the right size that consumers are looking for? 
• Or, perhaps the biggest question - has there simply not been any 7" tablets with a large enough price gap from the 10" tablets to warrant buying them? 

Needless to say, with a $199 price point on a 7” tablet backed by the brand recognition of Amazon, we will likely start to find out the answers to all of these questions during the holiday season this year.

2.    The Amazon Kindle Fire and most of the other non-Apple tablets run Android while the iPad/iPad 2 run iOS, and RIM’s PlayBook runs QNX.

Although Apple still has the highest number of applications available for an operating system, Android is gaining ground on them.  What that means to the consumer is that at the moment, pretty much any application that is being developed for an Apple tablet is also being developed for Android tablets – with the exception of some Apple & Google developed apps.  So, assuming the device will be used for at least one to three years, applications shouldn’t be a problem.

3.    Amazon has taken a different approach to storage – less on the device and more in the cloud. 

The Amazon tablet only comes with 8GB of internal storage, and NO expandable storage/external storage slots. Even though this may initially seem like a downgraded option since many consumers are used to getting 8GB or more of storage on their smartphones, much less a tablet where typically more video is used.  However, the flip side is the unlimited cloud storage that comes with the tablet.  Books, movies, music, and apps can all be downloaded to the device or streamed when WiFi is connected to a network.  Therefore, the vast majority of storage on the device is no longer needed.  Only time will tell if the market is ready for this approach, but cloud storage eliminates the consumer decision of “which device to buy – the 16GB, 32GB, 64GB?”

4.    There is no front or back camera on the Kindle Fire tablet.

In recent years, there’s been a lot of emphasis on front and back cameras alike.  Both smartphones and tablets have continued to increase the megapixels of the cameras, enable higher definition video recording, etc.  On smartphones, I would argue that the camera is a very important and desirable feature to consumers as they have essentially replaced cameras in the daily use scenario.  It’s simply easier to use your phone – which most people rarely leave anywhere without – to snap off a good picture in the moment of living your life.  That being said, although I’m sure there are pictures taken with tablets, the majority of marketing and use of cameras on tablets has to do with video conferencing and applications (i.e. virtualization, social networking apps, etc.).

5.    Amazon’s tablet has no Bluetooth, no HDMI output, and no GPS.

I highly doubt the lack of Bluetooth will factor vary heavily into a purchasing decision regarding a tablet.  Much like the camera argument, smartphones have a very specific need for Bluetooth since many people use Bluetooth headsets throughout the day while talking on their phones. 

Although HDMI is being offered (typically through a mini HDMI cable) as a feature on many tablets, in my opinion, the market really isn’t ready for it yet.  Many consumers are still adopting the Netflix streaming through Bluray DVD players and internet capable TV’s.  The promise with tablets is the ability to plug the tablet into any TV via HDMI and be able to stream movies through the tablet to the big screen.  But, most consumers just aren’t there yet.

GPS is the one feature that I believe Amazon may be missing in their tablet.  Currently there are thousands of apps that use location as a way to enrich the user experience.  Shopping apps allow you to immediately identify or search local stores for locations or inventory at the click of a button, while navigation and social networking apps allow the user to gain directions or find their friends through the convenience of GPS and Geo-tags.  While I don’t believe the lack of GPS will hurt sales too badly, I would expect to see GPS integrated in the next version of the Kindle Fire when it comes out.

Overall, the Amazon Fire tablet has access to the 2^nd largest app store in the market, provides cloud storage platform and capabilities which simplify the setup and use for its users, and hits a price point of $199 which is well below the competition.  Simply put, this tablet is designed to open the tablet market up to all consumers – not just the Apple ‘cult’ and Android ‘techies’.  I would say that Amazon has definitely thought ‘outside the box’ and will likely see the results of their efforts through the holiday season of 2011 and all of 2012.

Attached is a chart from PCWorld which compares the differences in features of various tablets.

HP stated yesterday that they plan to discontinue their webOS phones, but will "continue to explore options to optimize the value of webOS software going forward."  With that being said, the real question becomes "What will happen with webOS?"  Here are a few options:

1.    RIM can purchase webOS or partner with HP to upgrade their existing smartphone OS.

Pros:      RIM is rapidly losing market share for several reasons - mobile OS being one of them.  webOS is one of the best operating systems on the market, and integrating it into RIM devices would help to enhance the appeal of their smartphones.  

Cons:    The move will cost RIM both time and money to integrate webOS, when they already have a roadmap for QNX (RIM's newer OS).  Furthermore, if RIM does finally get painted into a corner, they can integrate Android into their devices which would cost significantly less, and would immediately add apps to their customers.

2.    Samsung can purchase webOS or partner with HP to expand the capabilities of their current products.

Pros:    Samsung is one of the largest electronics manufacturers in the world, and as of late, they're doing better than everyone not named Apple in the smartphone space (in terms of smartphone shipments at least).  Mobile to Mobile or M2M has become a hot topic as of late, with connectivity coming to cars, televisions, appliances, etc., and Samsung is a major player in most of the M2M spaces.  webOS would provide the opportunity for Samsung to evolve and embed an operating system that could allow features and apps to be shared across all of these electronic devices.

Cons:    Samsung already is working on Bada (their own mobile OS), and they have been very successful with Android as of late - which already has an app ecosystem in place.  Furthermore, Google is working on expanding Android capabilities into TV's and other electronic devices, leaving Samsung in a position to help to evolve Android without having to invest capital into the webOS platform.

When push comes to shove (and it will), HP may find a way to sell webOS.  However, the inherit problem isn't the webOS platform, it's the fact that the webOS ecosystem wasn't properly developed from the start.  As a result, none of the key players in the industry will want to throw money into a platform that has a very limited number of apps when they could simply use Android and increase product sales with far less costs associated.  That being said, much like Symbian, we may be witnessing the death of yet another mobile OS in the past year.  Who's next??

I agree with most of the predictions regarding Apple's big announcement tomorrow - its about the iPhone 4.  The bigger question about the announcement, however, is what is Apple going to do to fix the problem?  Here's a few of their options (and NO, a software patch is not going to fix the physical design flaw):

1. Recall all of their iPhone 4 devices, replace the metal material used around the device with a non-conductive material.  This would be the best thing to do for the customers because it will prove that Apple cares enough to fix their product and ensure that their loyal user base is happy.  However, the cost of this option will likely cause Apple's investors to be unhappy.
2. Send out cases to all of the new iPhone 4 owners to cover the problem with a band-aid.  This option would definitely have a lower cost associated with it, however, not all iPhone 4 customers are going to want the case on their device. Furthermore, how do you compensate the users who've already gone out and bought a case on their own.  Investors on the other hand, would see this as a viable solution that doesn't break the bank.
3. This is my top choice in handling the situation.  Partner with AT&T to provide an iPhone 4 credit on the accounts of anyone who bought the iPhone 4 and simply bought a case, or wants to buy a case for their phone and be done with it.  This would likely fix the problem for the majority of the iPhone 4 population.  For those that do not want the quicker fix, offer to fix the device if the user sends it in.  If Apple clearly lets their customers know that the fix may take a week or longer, then the amount of people who actually send their phone in will likely be reduced significantly.  Ultimately this approach would allow them to quickly compensate for those who've already bought cases, provide a case for those that would like one, or recall the devices for the really difficult customers.  Either way, this would likely provide the best solution for their customers while having less of an impact on their pockets.

Although the numbers aren't relatively as high as iPhone's were when it came on the scene (factoring in the fact that there is already a very rich development ecosystem for the iPhone OS, unlike there was when iPhone's app store first launched), the iPad has had a successful first month.  In comparing the numbers to the iPhone, a couple of items really stuck out to me:

1. The books category share is much lower on the iPad than the iPhone.  This is opposite of what I would have expected considering the design and touted application of the iPad as a highly versatile electronic reader.  Books makes up 15.2% share on the iPhone, and only 6.2% on the iPad.
2. The games category is nearly half of all iPad applications - 45.8% to be exact.  On the iPhone, the same category is 28.6%.  I would expect this to be slightly higher due to the larger screen on the iPad, which allows the ability to create more advanced games with HD graphics.  However, due to the price tag of the iPad, I would expect more of the customer base to date would be looking to the iPad as more of a productivity and web use item as opposed to a gaming device.  I expect this number will reduce in the coming months.

Attached are some charts that show the progress of the iPad app store in its first month.

After all the speculation and rumors, Steve Jobs launched what’s called the iPad,
the latest phenomenon from the Apple factory. Initial impressions are definitely driving
high amounts of expectations from the product as to how it might deliver to a new
segment of consumers – tech savvy, gadget lovers – who want to have various media at
their finger tips, on an ultra-light mobile device in an untethered manner! It definitely
seems like the iPad will deliver this – with the price point starting at $499 for a 16GB
device, going north to $699 for the max of 64GB for the WiFi model, there surely is an
opportunity for the product to be popular. The infusion of the 3G model in approximately
3 months from now will add flavor to the iPad, making it faster and more ubiquitous in
terms of connected usage. Although the pricing is about $130 higher than its WiFi sibling,
Apple understands the fact that the 3G would be a major pull for the die-hard fans –
those who will keep itching for the next three months without any complaints! The
actuality that Apple will have an unlocked version that can be used on other GSM carriers
goes to show that they believe this version will take off impressively.

This product is without-a-doubt coming out at a perfect time.  As many users are looking
to their smartphone as a way to manage their lives, update statuses on social networking
sites, browse the internet wherever they are, etc., the iPad will offer all of that in a very
aesthetically pleasing product.  Although the product may be too large for day-to-day
errands or business meetings, it’s perfect for students and frequent travelers who would
rather not carry around a large notebook everywhere they go.
 
Finally, Apple’s new iPad signifies another step towards the convergence between
smartphones and mobile computers.  It’s more than a smartphone, less than a notebook,
but just the right personal device for everyday users.  The iPad will likely be the best
selling electronics device of 2010.  Obviously, we feel that the predecessor’s behavior will
highly impact how the next generations of iPad will do. Till then we will keenly observe
the progress of Apple’s latest baby and keep watching this space for more on the iPad!

Steve Jobs demonstrates the Apple iPad

In terms of retail customer appeal, there is no doubt that the Apple iPhone is the top device on the market.  Over the last few years, the iPhone has seen success in the smartphone market similar to what the Motorola Razor saw several years back in the feature phone market.  Success typically provides leverage, and in Apple’s case, it has done just that.
 
As the iPhone exclusivity contract comes to an end this summer, Apple is working on contract negotiations with both AT&T and Verizon.  Although negotiations are taking place with both companies, the iPhone will continue to be sold on AT&T, however, AT&T will cease to be the sole provider of the iPhone in the US if Apple doesn't renew their contract with AT&T.  The most interesting part about the negotiations in general is that in many areas, it is impossible to do “Apple-to-Apple” comparison (yes, pun intended).  Each carrier has certain criteria that they will need to make the deal work, and Apple has pros and cons for both Verizon Wireless and AT&T.  Here are the key things that I believe will come into play as the negotiations continue:

• Network capacity – AT&T has had some bad press recently over the network failures and congestion problems due to the “unexpected” data usage caused by the iPhone.  Verizon’s network has more capacity at the moment, as well as more coverage for 3G data rates.  It’s also worth noting that Verizon so far seems to be ahead of AT&T on future 4G rollout plans as well.  Whichever company Apple signs with, rest assured, 4G rollout will be a part of the agreement.

• Technology – AT&T has a GSM network that currently supports the iPhone, while Verizon has a CDMA network.  One key difference in the technology is that GSM networks (as seen one of the new AT&T commercials with Luke Wilson) allow data and voice to work simultaneously; CDMA networks do not.  Furthermore, creating and distributing iPhones for a CDMA network would require redesign and reduce Apple’s economies of scale that they receive from producing so many GSM iPhones globally.  Although both companies are looking at deploying 4G/LTE technologies going forward, AT&T still has the advantage with its GSM based 3G network to fall back on.

• Financial Terms – Either way you look at it, Apple is going to make out quite well from an inevitable bidding war between AT&T and Verizon.  In the long run, Apple will make sure that they get the most out of any contract that they sign.

• iTunes Store – Apple sells applications for the iPhone via its iTunes online store.  Verizon likes to control applications and products through its online store as well.  Needless to say, this has already been worked out with AT&T, so aside from AT&T wanting a larger percentage of potential application sales (which falls under financial terms), AT&T doesn’t really have a problem in this area.  Ultimately, Verizon will have to make a decision on whether or not they want to give in this area because Apple will stick strong here since control over the application download process adds to the user-friendliness that has helped to make Apple’s products so successful to date.

When all is said and done, I believe that Apple may try to do the unthinkable – sign with both carriers!  The traditional iPhone continues to sell exclusively on AT&T’s network, with many stipulations in the new contract regarding AT&T building out and improving their network to support current and future data demands.  A new, slightly different iPhone-like product will be sold exclusively on Verizon Wireless’ network, with applications to be sold only through the iTunes online store.  This will also give Apple a new CDMA based device that can be sold in other international markets as well.  At the end of the day, Apple will likely be winning again in 2010.