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Apple Marketing: Taking Advantage of a Hiccup in Technology

At the Intersection of Form and Function, a Mad Dash for Greater Profits

Apple Computer‘s big launch earlier this week was initially greeted with the usual fanfare and exuberance, but by evening it had quickly muted as industry watchers began assessing the functionality of the new products.

Within a couple of days, the whole thing was looking was looking very bad for Apple.

What happened? How did Apple create such a tremendous PR fail? Or did we miss something?

A deeper analysis shows a much larger groundswell of activity which may result from this announcement, much deeper than the sweeping new versions of everything but the iPad and the iPod Classic, including the new operating system, iOS 4.2, the iTunes10 platform, a the new music social media platform called Ping.

The announcement itself was smooth as iPhone glass, with Steve Jobs shining as the lone pitchman, delivering product after product and emphasizing the success each has already had on the market, creating an aura of bulletproof marketing. Indeed, the numbers were staggering:

  • 25,000 iPad apps
  • 120 million devices using iOS
  • 275 million iPods sold
  • 6.5 billion apps downloaded (200 per second)

You get the idea. Big.

But despite all the bigness, the central theme around most of these announcements was … small.  And thin.

In fact, the new iPod Nano is so small it was immediately referred to in a Facebook Ad as “The music player your child will love to eat.”

And that was the start of a long list of criticisms that stretched well into the next few days.

At first, the feedback was kind of humorous.

“Facetime ipod touch. wow. every mobile carrier hates apple right now,” tweeted Tristan Walker, in reference to the huge additional bandwidth that would likely be required for dual-direction video phone calling enabled by the new iPhone 4 iOS.

“Apple’s new Ping is a terrible name,” tweeted Jonathan H. Strauss. “They should have just called it ‘OK, now MySpace is really dead.’

Then it was discovered that Apple’s new Ping music social network was rejecting Facebook requests.

After that, things got serious quickly. For instance, when Kara Swisher asked Steve Jobs about the Facebook issue, the terse reply she got back was that Facebook was making “onerous demands” that Apple wasn’t willing to agree to.

Then, reviewers began reporting that Ping wasn’t downloading despite repeated requests. Or it wasn’t behaving well.

“Ping on iTunes is a real pain in the backside to… find friends, navigate, discover where to engage. Not intuitive,” Tweeted @secretsushi.

And it got worse from there. Some users said Apple’s new iTunes10 was unavailable for download. Others noted that there was a surprising dearth of available content.

By late evening, Robert Scoble was tweeting serious disappointment with Ping “Ping = Ping Is Not Good. I really think it’s the most “un-Apple” thing Apple has done. Very poorly designed,” he tweeted. Others reported similar findings.

The new version of AppleTV didn’t  go unnoticed either. The small, handheld device streams Netflix movies at $4.99 – but only Hollywood box office hits, and only for 48 hours. Indie producers were no doubt dismayed by the seemingly unnecessary slight (it may be worth their while to promote the fact that anyone can stream movies for free using BitTorrent).

As an upside, Jobs said the iOS 4.2 allows streaming of Netflix to the larger iPad when it is available in November.

By Friday, ReadWriteWeb’s Sarah Perez was reporting that Ping was completely overrun with spam, primarily due to the fact that there is no credit-card requirement to sign up and because the spam filters appear to be wholly inadequate to the task of managing the site.

So, what went wrong? Why the tremendous fail?

Or was it a fail?

If  you believe Apple, everything is cool. Two days after the announcement, the tech giant issued a news release saying Ping had amassed 1 million users in just 48 hours. But the New York Times’ Devinda Harawar was unimpressed by this, noting that Google’s Buzz service – while no great winner itself – achieved tens of millions of users in the same time span.

Coming on the heels of an earlier announcement that was all but scuttled when a beta iPhone was left in a bar, only to be thoroughly reviewed by Gizmodo, one would have expected Apple to be meticulously thorough with every aspect of this rollout, but it looked more like the “amateur hour” that Jobs himself earlier said he was trying to avoid.

Considering how pervasive the bad apples were, the root of the problem had to be either widely systemic – which, coming from Apple, would be a huge surprise – or the result of something outside of Apple altogether.

So why did this company, which thrives at the apex of form and function, seemingly lose its corner on the market? What happened to Apple’s marketing strategy?

Some might speculate that the company was worried about the imminent Samsung tablet announcement, but that would be out of character for this tech giant. Even the growth in Android apps is not likely to have spurred Apple to this level of activity. It must be responding to what it sees as a bigger event.

My guess is that Apple senses a narrowing window of opportunity for its biggest consumer hook – apps.

Put simply, Apple may be trying to drive applets to become the ubiquitous Internet interface for digital technology, before next-generation processors make them unnecessary.

That’s right. Apps are in danger of becoming unnecessary.

Recall a couple of weeks ago that Wired Magazine proclaimed that “The Web is Dead.” Actually, they were right. The HTML-driven, Google-searchable Web is on its way out, as indicated by this Cisco chart republished in the Wired article.

This is about a fundamental change in how the Web is accessed. The major new points of entry into the Internet are apps and video. If you note that Apple has staunchly refused to incorporate Adobe Flash into its products, you’ll quickly see that Apple is trying to corner the both major markets for growth.

But what this chart doesn’t show is that this fight for control of Internet access is a short-lived one.

The fundamental reason that app use is growing is because mobile computing devices can’t handle a full implementation of common software programs – today.

Why? Two reasons.

First, today’s processors and memory options for mobile devices aren’t capable of delivering high performance and long battery life at the same time. Intel hit the wall with this problem, and still has not come up with a workable solution.

Second, the current telecommunications infrastructure simply can’t handle all the traffic, either.

So, rather than giving mobile users a full version of the software that they would see, for example, in a word  processing program, Apple is allowing apps developers to create simplified versions of these applications (applets, or apps) for mobile products. They’re essentially a subset of the interface that you would experience on a PC or Mac. The meat  of the application resides externally, on a server. It’s a smart approach, but it’s only a bandage.

But the reality is, the technological hiccup that created the need for this bandage is not going to last long.

Already, companies such as Intel, NVIDIA and the ATI division of AMD are developing powerful multicore processors that utilize both CPUs and GPUs (graphical processing units) to split intensive tasks, such as video rendering, into many smaller tasks that can be executed and recompiled quickly while serial tasks, such as audio processing, continue to operate at a higher rate of speed.

“The future is heterogeneous computing in which we use CPUs (which are optimized for single-thread performance) for the latency sensitive portions of jobs, and GPUs (which are optimized for throughput per unit energy and cost) for the parallel portions of jobs,” said NVIDIA chief technologist Bill Dally in a recent tech chat. “The GPUs can handle both the data parallel and the task parallel portions of jobs better than CPUs because they are more efficient. The CPUs are only needed for the latency sensitive portions of jobs – the serial portions and critical sections.”

Because parallel processing involves multiple cores and thus, slightly larger chips, this technology will first be available in places like digital TV, then in larger form factors like desktops, laptops and tablets. As the technology becomes smaller, more integrated and more power efficient, it will work its way into wireless mobile devices.

Similarly, new storage technology such as HP’s memristors are likely to boost mobile data storage and transfer speeds by orders of magnitude above current capabilities. And, more companies are engaging in cloud computing for data and video streaming. This technology, which essentially involves moving server farms closer to the customer, where applications can be drawn down off the Internet only when they are needed, rather than saved on to computing devices —  all but eliminates the need to store huge software programs on mobile devices.

And, the entire transition into these new technologies is already underway.

So Apple is under pressure to sew up the market by ensuring that apps are the preferred delivery vehicle for Internet access. Before they become unnecessary.

To date, the strategy seems to be working.

The trick – and the reason for the bad apples at this press conference – is to remain ahead of the competition. So timing is of the essence.

That’s why Apple is moving aggressively into the iPad, that’s why it’s created the iOS 4, and that’s why it’s now moving into Apple TV. In fact, as Dean Takahashi pointed out in a story today, Apple TV could push its apps platform squarely against console gaming devices … and give users the added benefit of mobility.

The creation of the Ping service was another opportunistic boon: Apple saw that MySpace was losing ground to Facebook and decided that it was a great chance to grow the iTunes business by incorporating a social context into the iTunes store…based on apps.

Fundamentally, almost all of these apps are pretty crappy, which should come as no surprise; they are, after all, just a subset of better technology. But they do allow Apple to continue growing its market.

So how long will this empire-building last?

Not much longer, I suspect. Apple’s competitors are quickly learning the form and function game, and Android app downloads are increasing quickly. Hence the reason for Apple’s hurried and rather sloppy new product intros.

The real battle will emerge when processor and memory capacity allows the industry to move mobile devices past the nascent apps stage and begin streaming more sophisticated programs and capabilities. At that point, the “peak apps” period will have been noted, and then the downloads of much richer and more powerful content will begin.

Still, by any measure, this will allow for many quarters of handsome profit taking.

The next big question is, What will the next generation of Internet interface software will look like? It may not be apps, but it won’t be your Daddy’s Web browser, either.

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2 comments on “Apple Marketing: Taking Advantage of a Hiccup in Technology

  1. Pingback: Steve Jobs is an Evil Genius in Halloween Garb « Siliconcowboy's Blog

  2. M.Waqas
    December 27, 2010

    Nice.. Thankyou very much..

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This entry was posted on September 5, 2010 by in Tech Trends.
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