Will Joel help sell tablets?

Since the past month (if not three years) for Apple watchers has been uninformed speculation about the iSlate/iTablet/jumbo iPhone, I figure on the eve of the (speculated) announcement I should add my own 2¢.

A little over a year ago, sociologist Joel Podolny quit as dean of Yale’s business school to become “Vice President and Dean of Apple University,” as he self-reports on his LinkedIn and Facebook profiles.

At the time, I offered my own speculation on the sketchy information about Joel and his new role, but effectively he’s been in stealth mode ever since. I have a hunch that his role may become more clear after the iTablet is announced.

Apple’s plans seem to be leaking out because of all the content relationships that it is negotiating. Speculation is that it’s a device with a 10" screen that (for reasons that were obvious a year ago) will run the iPhone OS.

Since this is only the first device of many, the more interesting thing is the content/ecosystem strategy. Apple is building a supply of content to compete with Amazon’s Kindle, the Barnes & Noble Nook, and everything else out there.

That’s where I think Joel Podolny comes in. An obvious use for an e-reader is for college textbooks: a $200-400 toy (uh, e-book platform) is not implausible for a college student, and e-books would help textbook publishers kill the scourge of used textbooks (while reducing distribution and inventory costs). Amazon has conducted demonstration projects with e-textbooks to disappointing results.

In fact, CNET reports that McGraw-Hill’s CEO Terry McGraw decided he wants to be on Steve Jobs’ dirt list by pre-announcing the tablets Tuesday on CNBC:

Yes, they'll make their announcement tomorrow on this one. We have worked with Apple for quite a while, and the tablet is going to be based on the iPhone operating system, and so it will be transferable.

So what you are going to be able to do now is, we have a consortium of e-books. And we have 95 percent of all our materials that are in e-book format on that one. So now, with the tablet, you're going to open up the higher-education market, the professional market.

I assume Apple has solved the format problem: Windoze notwithstanding, universities are not going to mandate the use of a proprietary format (like the Kindle AZW) which implies that the textbooks will be distributed in something like ePub or PDF. (As with the iTunes Store and music files, Apple may end up using a proprietary DRM system if not good alternative exists.) This is something that has been holding back e-book sales for a year.

Which brings me back to Joel. Apple has the iTunes Store for entertainment, and iTunes U for video (or audio) course lectures donated by universities. Once it has textbooks, what’s missing?

One possibility is to negotiating the content relationships with textbook suppliers — but that doesn’t sound like a “dean” to me.

The other possibility is a new modality of delivering instruction: not just hypertext books and linear lectures, but a more interactive and engaging experience. (Jobs’ nemesis John Sculley was demonstrating this with the Knowledge Navigator vaporware video more than 20 years ago).

This would mean that the tablet would be more than an e-book reader, just as the iPod was more than a music player and the iPhone was more than a phone. Apple is a systems company that new platforms to enable creation of new markets.

This self-image is illustrated by the tagline at the bottom of every Apple press release:

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.

I'm betting that tagline will be different next week, and not just because Apple has a 10" iPod Touch.

Nokia vs. Google platform integration

After spending $8 billion to buy Navteq and its mapping database, Nokia has now decided to give away the mobile navigation service with its various phones. Darla Mack describes the new service from the standpoint of Nokia handset users.

Of course, maps — fixed line, mobile, location aware (whether GPS or fixed line IP address), 3D, turn-by-turn navigation and every other incarnation — are a major strategic area for the Monster of Mountain View. As a friend noted last week, the location aware mapping services are probably the only category leading aspect of Google’s Android platform right now.

And, in fact, Forbes remarks on the forthcoming battle between Nokia and Google. However, Forbes spends most of its time on the impact on TomTom and Garmin, which are already being substituted away by the Apple and Google mobile phones. (Nokia is stronger than either the iPhone or Android in Europe, where Forbes reports that TomTom has 44% market share.)

Even if the mobile phone substitutes aren’t quite there yet, this is another milestone in the mobile-phone-as-the-Swiss-Army-knife-convergence-device view of the 21st century electronics industry. This highlights the direct and indirect competition between the various service and software platforms: Nokia is a hardware company that offers services, Google is a services company that now sells hardware, and both are providing handset software.

So it seems like another milestone away from open innovation, towards vertical integration (or related diversification), in which every platform owner feels it has to own every piece of the puzzle. That doesn’t count the network operators, who also want to rent their own mapping services. (The Verizon service comes in for caustic criticism by one of the Forbes readers.)

To me, Apple’s purported partnership to promote Bing on its iPhone makes more sense than integration. My hunch is that Google and Nokia will still try to control every piece of the stack, even as Microsoft retreats away from mobile platforms into applications.

Summarizing the iPhone transformation

Three years ago this month, Apple announced the iPhone. This was only a few weeks after I’d had lunch with Michael Mace, who I’d met in 2002 when I was trying (unsuccessfully) to get internal permission to study the Palm/Palm Source spinoff.

The day before the iPhone announcement, I suggested to Mike that we send a paper on an unspecific topic to an industry-academic conference called LA Global Mobility Roundtable (LA GMR). The next week, I emailed Mike to say “I think it would be fun to write something about the iPhone for the LA conference.”

And so began two papers on the iPhone that we wrote and got accepted at LA GMR and at DRUID 2007 conferences, and that were also presented at UCI and Boston University.

Since all of these presentations were before the first iPhone shipped, the audiences correctly noted the speculative nature of the papers. Particularly in Europe, people were skeptical that the iPhone would be a success — or could ever challenge Nokia’s insurmountable lead in smartphones.

By waiting until February 2008 to submit our paper to Telecommunications Policy, we could talk about some early success measures, such as the 4 million iPhones sold in the first 6½ months on the market.

We did two more submissions, and updated the data with each iteration, until we got word on Monday that the paper was accepted. The final corrections to the page proofs went in Thursday. (The final uncorrected draft is on my website, and I’ll link to the official copy when Elsevier posts it.)

The orientation of the paper evolved significantly over this period, thanks to prodding by the reviewers and some additional clarity on our part. (A dry run at Michigan State last spring also helped).

Still, I think we captured overall some of the transformations of the US (and lesser degree, global) cellphone industry due to the iPhone:

• AT&T went to Apple because it wanted more people to use its data network. It generate data revenues, it set a precedent by requiring a data plan with every phone. Thanks to the iPhone, AT&T now seems to have more than enough data users, and data is becoming increasingly common across the entire industry.
• Competitors copied Apple’s hardware, but none had (or yet have) copied its systems competencies. (Google has come the furthest and may still get there, while RIM is serving an entirely different market).
• By linking to the existing WWW, Apple was able to solve the chicken&egg problem of attracting complements before demonstrating an installed base.
• Before the success of the iPhone App Store, the iPhone succeeded because it provided the best approximation of the World Wide Web.

We could support the latter point with this great quote from Steve Jobs a month before the first iPhone shift:

[Cingular has] spent and are spending a fortune to build these 3G networks, and so far there ain't a lot to do with them. People haven't voted with their pocketbooks to sign up for video on their phones. These phones aren't capable of taking advantage of it. You’ve used the internet on your phone, it's terrible! You get the baby internet, or the mobile internet -- people want the REAL internet on their phone. We are going to deliver that. We're going to take advantage of some of these investments in bandwidth.

Like any journal or journalistic article, our paper is a simplification of reality, and some may quibble over some of the details — but I think we accurately capture for posterity why the iPhone was a hit. (Or, as a historian told me when I was getting started, “first, get the stories right.”)

I’m really proud of this article, which is probably why I spent more time (more than a day) on the proofs than any previous article — not counting the time Mike spent on it as well.

A decade from now, I think it will rank up there with my 2003 most-cited journal article in Research Policy on open source strategies, as well as my first journal article from the San Diego Telecom project, published a year ago in the Journal of Management Studies.

Updated February 13: Telecommunications Policy emailed me today to say the final (prepress) final page proofs are online at the Elsevier website: the article DOI is 10.1016/j.telpol.2009.12.002.

Freemium solves an annoying little problem

Last August, I discovered a new TV series on ABC called Defying Gravity. It had its faults: some called it “Gray’s Anatomy in outer space” although that ship sailed two decades earlier with LA Sex Law, which introduced the genre of the oversexed workplace to the American TV viewer psyche. Still, Defying Gravity was one of the first new sci-fi shows on broadcast TV this century. (I’ve been ignoring the V remake since the first one wasn’t all that good and the accounts make this one sound worse.)

Parenthetical comments aside, I was enjoying Defying Gravity until ABC pulled it after airing 8 episodes in August and September. The CTV-produced show (filmed in Vancouver) finished its 13 episode run in Canada (eh) although CTV stopped its Facebook page after 8 episodes.

Since tonight was the first night this week I had no lame “24” episode to watch, and since Comcast yanked my SyFy (and Stargate episodes) as it deliberately sabotages basic cable, tonight I went looking for Defying Gravity. Thanks to Google, I found it.

The Canadian over-the-air broadcasts are available commercial free on Ninjavideo.net, apparently redistributing content from Megavideo.com. (They appear to be related sites). Megavideo is using a freemium model and both are trying to upsell me from the free to paid version, but I’ll take the free viewing of 72 minutes/day. And if they get insistent, I'll try one of the Russian sites that claim to have it.

Both sites seem less than totally reputable, and I mean beyond distributing someone else’s pirate video without permission. (The latter category also includes Eric Schmidt and GooTube as well as VC-funded last.fm.)

I don’t play pirated MP3 files and normally I don’t watch pirated video. But after waiting 4 months for ABC to make good on its promise that the show would be back (although it’s now deleted from its show website), I’m hoping most would forgive me for concluding that ABC’s “someday” really means they are using the recursive mañana principle.

So at least I’ll be able to watch the Antares astronauts of 2052 visit a planet and wrestle with their personal demons. The rest of the backstory (and their Grand Tour of the planets) is apparently only known in an alternate universe where sci-fi shows get good ratings.

Matt and I agree on the Big G

After I posted last week about Google’s half-full glass openness, my friend Matt Asay tweeted a plug for my column by quoting the punchline:

"Google is a self-interested, profit-maximizing, semi-proprietary co that embraces openness when it suits its purposes" http://bit.ly/5GLF0l

Thanks to Matt and his 4,841 followers, that may be one of the most quoted things I ever say in my life.

But Matt was too modest to mention his own very similar thoughts on the subject last month on his Open Road blog. I missed the Dec 22 posting because of the hectic pace at the end of the semester and a few days before Xmas.

The title alone told me that we are on the same page: “Google--not necessarily 'more open than thou'.” He was keying off a self-interested (and self-serving) post by Google SVP Jonathan Rosenberg that defends its right to unilaterally choose what parts of its solutions are open and closed. To which Matt deliciously responded:

Am I the only one that just had Napoleon of "Animal Farm" flash through their minds while reading that statement? Some animals are more equal than others, and some companies know better than others when to keep code closed.

He also quotes a Gartner analyst as saying

The art of business in the 21st century is figuring out how to open up your suppliers' and competitors' business while keeping yours tightly sealed. And in that endeavor Google has proven highly successful.

A few excerpts can’t do the article justice, so I recommend the entire post to anyone interested in open (or semi-open) IT strategies.