The world does need a tablet, but not the one you're thinking
The problem with a manufacturer creating a new market is that it must demonstrate a latent need among a sizable plurality of potential consumers, for a product they don't know they need. No one ever needed an iPhone...until round about January 2007.
The current debate about the probable Apple tablet, or tablet-like, product, whose formal announcement is slated for January 26 in San Francisco, is really about whether another latent, iPhone-like need actually exists, or whether Apple may be tapping for oil where there is no oil -- something the company has done in its history, more than once. The debate was joined last week by our Betanews contributors: independent analyst Carmi Levy, who argued in favor of breaking through the smokescreen of hype and reassessing our priorities with respect to personal and business needs and wants; and former Jupiter analyst Joe Wilcox, who argued that Apple has not demonstrated a market need for the type of device that most reasonable speculation and analysis projects an Apple tablet device to be.
This is the platform business
Like me, both Carmi and Joe are grown-ups and are fully responsible for their content. However, in the interest of expedience, I'll attempt these summaries: The gist of what Carmi said is that it seems unreasonable for bloggers and journalists (two camps whose overlap appears to be shrinking almost daily) to presume that a market exists for an undemonstrated and even indescribable market category, simply because it's Apple that's producing it. And the gist of what Joe said is that the existing tablet market is a niche in which only limited platforms survive, and the way Apple is structured, it cannot profit from a limited platform. It either needs to have iPhone-like penetration, or it will flounder like AppleTV.
With the Consumer Electronics Show coming up this week, and with Google's and Apple's announcements slated for before and after, respectively, Betanews will be focusing a lot this week on the subject of platforms. There's a lot of device and gadget publications, some of which are exclusively about the iPhone. When I'm asked to distinguish Betanews from these, I tell folks that I think of us as a platform-oriented publication. We're about the foundations on which markets are built, and which devices tap into for support. Windows is a platform, and we're often about that. Web browsers have become platforms, and we present them as such. And yes, the iPhone is a successful platform, upon which the iPhone device resides.
If I were a restaurant critic, I'd probably be too interested in the chefs, their training, the layout of their kitchens, their management styles, and their marketing techniques, for me to flourish in a publication that's dedicated to rating their respective dishes on a four- or five-star scale. Likewise, I'm not a "gadget guy." I'm not nearly as interested as products that manifest themselves on the surfaces of markets, than the underlying forces that make markets move.
It is from that vantage point where the following question is most naturally, and unhesitantly, asked: Where is the platform on which this dream iTablet will reside?
The iPhone succeeded first of all because Apple established a viable platform for the delivery of applications that people would want to use, partly because the device is cool but also because the device makes (most of) those applications functional and useful. For Apple to accomplish a "two-fer," it needs to find a viable platform for the delivery of similarly functional and useful applications on a larger, but not too large, device. Specifically, apps that fit somewhere in-between an iPhone and a Mac.
Now, a lot of the resistance we're seeing to Joe's latest piece is probably generated, in large part, by his headline: "The world doesn't need an Apple tablet, or any other." That's where Joe threw gasoline on the fire; the rest of the story is where he tossed in the kindling and the firewood. Joe's blog is published through Betanews, so he is not only responsible for his content but also his headlines. If I had been an editor on that story, there's a good chance I would have considered moderating the headline -- that's my usual tendency, moderation, toning things down. Of course, the following awful reality sets in: You might never have read the story, because articles generate momentum in the modern Internet by way of their headlines. And Joe knows how to write headlines that get his blog posts read.
The other problem, though, is that I fear many readers failed to absorb a very important point, by virtue of having already been affronted by the headline. When speculators dream about what the Apple tablet might be, they're considering it in terms of the device -- the form factor, the multitouch functionality, the prospective layout of the home screen -- if there is one -- compared to iPhone. But there is relatively little speculation about addressable market, which veteran analysts like Joe perceive as the substance of the platform upon which a tablet is based.
The real-world spectrum of price/performance
The very nature of blogger Robert Scoble's response to Joe demonstrates the true extent of the blogger speculation problem: that too many folks are dreaming about the device from the surface rather than underneath. There's no market for a tablet, Joe, argues Scoble? Why, look at this restaurant I went to the other day. There's a touch-screen on the cash register. And here's a touch-screen on the GPS system inside my car. And one on the gas pump. There's no market there, Joe?
Photographic evidence that Apple's gadgets are so intriguing and compelling that they make folks forget about the platform.
In the information technology realm, whether we're talking about end gadgets or upstream servers, a platform is like a reserved channel of space in the market. If you've seen the Federal Communications Commission's ever-changing map of spectrum allocation, you see all the various frequency bands that are reserved for use by specific applications -- mobile radio, HDTV, Wi-Fi networking, emergency communication. The technology market is like a spectrum map, but instead of a range of frequencies, we have varying levels of price/performance. Platforms are the "transmitters," if you will, of functionality at the various price/performance points. The key difference here is, the makers of successful platforms don't petition some federal agency for the rights to offer service at a particular price -- the folks to whom they make their petitions are customers.
The Microsoft ad campaign for Windows, launched just before the release of Windows 7 last year, invoked the slogan, "I'm a PC" -- borrowed from Apple's own TV ads. It's a good campaign, but we all know that Windows is not a PC. If Ray Ozzie were the one managing the slogan (the way I've often found myself wanting to moderate Joe's headlines), the slogan might have ended up, "I'm three screens and a cloud." But who would have understood that? Windows is a platform. PCs are successful because Windows makes them possible.
The iPod is successful because iTunes is a phenomenal platform. The iPhone, as a manifestation of iTunes, is a successful platform at the price point worked out between Apple and AT&T (and its worldwide carrier partners). Financial analysts are considering today the full extent of that success: As Philip Elmer-DeWitt reported last night, the mid-range of analysts' estimates for iPhone unit sales in just the last quarter, is an astounding 9.5 million units.
If Apple's next big thing is a new platform on which a new device is based, then it must be positioned on the price/performance spectrum in enough "bandwidth," if you will, to enable Apple to charge its typical premium, and perhaps be subsidized by a carrier, but also as something other than a low-end Mac and something distinguished from a Windows netbook. There's not an obvious, indivisible segment of spectrum where a reasonable person may imagine such a platform to manifest itself.
However, the new device may effectively be a big iPhone, tapping into the existing platform that Apple has already constructed. But then it would find itself competing with the other end of the iPhone platform, which not only seems unreasonable, but something which Apple CEO Steve Jobs has almost certainly learned, by now, not to do.
"We forget the big picture"
The gist of the remainder of the rebuttals to Joe's piece today appear to center around the notion that Joe simply isn't imaginative enough. If only Joe would stop being such an analyst about things, asks True/Slant's Marc Flores, and open his mind up to the unexplored potential, he could imagine all the various ways that Apple could pull this off.
The platform business is, sadly, much less imaginative than bloggers would like for it to be. In fact, its very name is all about grounding ideas in reality, building the foundations upon which great concepts and devices may be based. That brings me back to something Carmi said last week, quite poignantly: "We spend so much time discussing the minutiae of what this mystery thing may or may not do that we forget the big picture of why we use technology in the first place."
Folks who are grounded in reality, as TechCrunch's Paul Carr pointed out today, are not as lost in the minutia and surface details as a great many gadget-bloggers. When they invest in a device, it's because the potential of the platform has proven itself to them.
With the Apple tablet, with the next Palm device, with the next generation of Intel Atom-based netbooks, with the next BlackBerrys, with the next high-definition on-demand movie players, with everything we'll be discussing this week and into the weeks that follow, we need to stop becoming gadget-bloggers and resume the course of journalism. Contrary to appearances, the world does not run on gadgets. And when everyday folks look at people infatuated with gadgets as some kind of weirdo not grounded in reality, there's actually a real-world reason.