It’s not that the iPad isn’t a cool looking device. It’s beautiful. It’s that I don’t see it as the savior of all things analog the media is making it out to be. Beyond that, it seems to me it has a very limited audience.

The iPad is targeted at people who care enough about technology to pony up a minimum of $499 for what is essentially a large iPod touch (others may disagree but that’s my opinion). Reports are out today from Engadget and others indicating the Wall Street Journal will be available on the iPad for $17.99/month and monthly issues of magazines will cost close to newsstand prices. That’s cute but the reality is few industries have found success by simply porting their existing business model to the digital arena. Changes are required. Companies must adapt and I don’t believe Apple is encouraging media companies to do so. They’re stuck in old school thinking.

Media companies aside, here are my issues with the iPad based on the specs I’ve seen:

• Pricing – Most people still don’t have an extra $499 to spend on an optional item. Pinning hopes on the device ignores the millions of people who still believe $1 / day for a newspaper they can leave on the bus is the ultimate in convenient. On top of that, this is a market where people still prefer buying on-contract phones because the price is subsidized. Even Apple has helped support that model with the iPhone.
• Multitasking – It’s been claimed as a weakness for the iPhone, the iPod Touch and now, the iPad. It hasn’t mattered for the first two because people don’t multitask that much on phone type devices. They can do without it. It will matter for the iPad because people are used to doing multiple things at once on their computers. They’re used to switching back and forth between multiple applications. Multitasking matters…
• Apple ecosystem – Don’t get me wrong. I think Apple’s ecosystem is brilliant. I immensely admire Apple’s ability to create new core competencies for the company around industries tangentially related to their true fundamental business model. It makes customers’ lives easier. But, the reality is, it only makes Apple’s customers’ lives easier. There are still millions of desktops, laptops, Kindles, Nooks, Android tablets, etc that have to be supported. By building their digital capabilities around the iPad, media companies will end up ignoring others. That seems like a good way to destroy a company rather than build it up.
• Size – I can’t believe no one else is saying this. This thing is too big. Yes, it’s light and thin. That’s great. Unfortunately, you’re going to be carrying this thing in your laptop bag along with your laptop, books, papers and that thing with hard edges you totally forgot about. That ill-forgotten thing will crack your iPad screen. A device this large in a bag will be broken within weeks (or so I think). Once you add a case, the device becomes a little bit heavier and a little bit thicker – taking up a little more space and adding a little more weight to your bag. Not so much fun…

“Even a broken clock is right twice a day” is an oft-heard refrain. The opposite of that must be something along the lines of even the perfect stumble sometimes. I think this is Apple’s time to stumble. Unfortunately, newspapers and magazines can’t afford the trip as well as Apple can. Let’s hope they’re hedging their bets.

For your kicks, Apple’s iPad video…

That ability to create devices that “just work” and to make them more user friendly, cooler and better looking than any other company in the world has earned Apple three years at the top of Fortune’s Most Admired Companies. Where other companies create products consumers tell them they want, Apple creates products consumers only know they want once Apple produces them. It’s an amazing business model and they do it excellently.

My problem with Apple is mobile. Without question, Apple redefined the way consumers saw phones. By offering a phenomenally usable operating system with a beautiful user experience, Apple made the cell phone as cool as an iPod. By further, creating an iPhone ecosystem via the iPhone App Store, Apple converted the device from a phone to a multi-function device that allows its users to lead a life where everything they need to do can be done from the palm of their hand.

What Apple did was not new. Palm phones had long supported color icons, touchscreen input and rather small form factors. Nokia phones pre-2006 (when the iPhone debuted) offered smartphone style functionality, Wi-Fi, downloadable applications (I know because I built an app), the ability to surf the web and view video (if you had the right software). Blackberrys from RIM have long offered an exceptional communications platform. All of this existed prior to the launch of the iPhone. Apple’s contribution was bringing it all together in a phenomenally tantalizing package that just worked.

Putting a beautiful wrapper, however, on old technology is not novel. It is exactly that lack of novelty that has me questioning Apple’s recent actions in suing HTC for patent infringement in a thinly veiled attack on Google’s Android. Engadget provides a detailed explanation of the patents involved here.

Apple has not attacked HTC because it is a cell phone manufacturer who might (or might not) infringe on their patents. In fact, Apple has attacked HTC because they are at this moment the only phone manufacturer who 1) is relatively small; 2) makes devices whose capabilities, on many levels, rival those of the iPhone; 3) creates great devices that use Google’s Android.

Android is the mobile operating system many see as the iPhone’s greatest competitor. Nokia’s Symbian and RIM’s Blackberry OSes both have greater market share than the either the iPhone OS or Android but Android has been developed much in the same way the iPhone OS was — with phenomenal speed, tremendous attention to detail and a focus on both ease of use and being easy on the eyes. Combining the Android operating system with HTC’s hardware was a shot across Apple’s bow. Their response, however, has the potential to stop the mobile business in its tracks – leaving Apple as the only company capable of creating modern smartphones.

Apple’s immediate goal is to neuter Android and HTC before they can truly challenge their leadership position. This is not about patent infringement. The broad nature of many of Apple’s patents and their questionable applicability (as well as the likelihood that prior art can be demonstrated for some) indicate that Apple is going for a shot gun approach to take out the weakest gazelle in the herd. You can be sure that if Apple is successful that they will soon go after Nokia, RIM, Samsung, Sony, Motorola and other OS and hardware manufacturers. Apple clearly wants to own the mobile business all to itself in spite of other companies having long history of mobile accomplishments long before Apple got on the field. Their goal is to decimate all competitors in a way that relies not on consumers’ demand for their products but on questionable intellectual property awards. To my mind, that borders anti-competitive and is not in the spirit of how the marketplace should operate.

Let’s be clear. Apple should absolutely have the ability to protect their intellectual property. For example, the slide to unlock a phone patent seems valid to me. I don’t know who owns the patent for the zoom in / zoom out gesture on the iPhone but if that’s Apple, then that is absolutely protectable. To want to enforce patents on multitasking or using parsed data, however, is a stretch. (Perhaps the stretch is the USPTO even awarding such a patent.)

What I’d like is for Apple to not try to hobble the mobile business buy pursuing enforcement of questionable patents. I’m sure Motorola, Nokia, RIM and other companies have similar patents that could just as simply be applied to Apple. Instead, I’d like to see the companies press each other to innovate. I like the pressure the success of the iPhone has had on the rest of the mobile business. If not for Apple, we’d still be on 20MB calling plans and Palm would have the most advanced phones. And if Apple was in the business by itself, what we’d find is that we’d be stuck using a phone that only allowed us to download applications Apple liked and doing only things Apple approved of. We’d find that even Apple would slow down innovation if no one was nipping at its tail and, most of all, we’d find that the mobile business was a whole lot more boring — except for Apple.

Let’s not let Apple ruin the mobile business…

Pricing isn’t the only issue. As we now see from the AT&T / iPhone debacle, when carriers hold exclusive agreements on phones they come to hold their customers in contempt. AT&T sat and watched Apple launch the iPhone, the iPhone 3G and then the iPhone 3GS – knowing full well the impact the phones would have on their network – and did little to increase the capacity of the network to match demand. Sure, you have a beautiful high-speed capable iPhone, but your network often only supports slower speeds because of AT&T’s commitment to mediocrity.

Carriers need to get out of the retail cell phone business. Carriers have been complicit with manufacturers in gouging consumers on the prices of cell phones. Doing so has led to a huge conflict of interest that has resulted in the carriers considering the devices more important than the services they offer. It’s almost as if the broadcast networks sold the TVs on which you watched their shows. Remember when Ma Bell leased you a cell phone along with your phone services. They stopped post breakup because they realized phones weren’t there core competency. The same goes for the carriers. They’re essentially network service providers who play cell phone sales people on TV. They need to stop.

The alternative, in my mind, is two-fold:

• Create phones that work on any network — I don’t mean create unlocked phones. Instead, I’d like to see phones, like the Blackberry Storm, that support the network technologies of Verizon, Sprint, AT&T and T-Mobile. The expense of adding multiple technologies to mobiles doesn’t add substantially to the price of the phone and it gives consumers more options
• Manufacturers should partner with big box stores – Stores like Walmart, Target and Best Buy have the heft to pressure manufacturers to deliver phones at prices that are more consumer-friendly. It is true that manufacturers’ margins will decline, but I expect they’ll make up some of that on quantity given the lower prices, lack of burdensome contracts or carrier exclusives. What we’ll also see as a result of this, I believe, is more innovation. Lower margins give manufacturers less reason to stick with phones that don’t sell. Lower prices will lead to greater sales of popular phones. This, I believe, will lead to greater and quicker phone innovation as manufacturers work harder to deliver phones with innovative features that allow them to keep a leg up on their competition.

These two changes will change the industry but in doing so benefit all involved. Consumers will have more selection at better prices. Manufacturers will be able to better gauge consumer need and react more quickly as consumers become free to buy phones as frequently as they’d like. Carriers become more able to focus their energies on their core competencies – their networks. Seems like a win-win to me.

I’m at a fan of Nokia phones – or at least I was. Nokia, one of the largest mobile companies in the world, has failed to establish a real foothold in the U.S. market. Unfortunately for them, the U.S. is where so much of the mobile excitement is these days. Between the iPhone, Google’s Android and RIM’s quickly evolving Blackberrys (Canadian, I know), the smart-phones have changed the way people see and use phones. Nokia has sat on the sidelines releasing phones with inferior features and usability inhibited by a long-in-the-tooth operating system. They’re one of the few manufacturers who has actually tried the end-run around the carrier-retail model by going direct to retail. High unsubsidized prices and curious lack of marketing, along with lackluster phones, have impeded their success. this article from the New York Times analyzes some of their issues.

Based on recent news, there is another company considering trying to circumvent the carrier-retail model. It is rumored that in January Google will launch its own HTC manufactured Google Phone. The phone, if speculation is accurate, will be sold directly through retailers as opposed to carriers. I have not seen pricing details but my own guess is that the price of the phone will need to be competitive with that of subsidized phones sold by the carriers. I also expect that, contrary to Nokia’s approach, Google will market the Google Phone – perhaps heavily.

I’m hoping that this could be the start of some really great changes in the mobile phone business that lead to more innovation and better products for consumers.

• News businesses that try to copy their print media ways to the Internet are dead in the water.
• Contrary to what print news companies believe, readers never paid for news. They paid for the paper on which the news was printed. Having something tangible made it seem as if it should be paid for.
• Internet users will eventually pay for content. They, however, will not pay for content that they don’t feel they need. News as presented on cnn.com or msnbc.com or even nytimes.com is not news the average person NEEDS. There is no compelling reason to pay for it. The results of this poll by PaidContent UK and Harris Interactive prove the point that consumers aren’t interested in paying for news online.
• B2B news outlets face a larger uphill climb to the pay wall. Their news can often be found on blogs, forums and Twitter long before the small staffs at B2B media companies can even write a story and vet their sources. By the time they post the story, readers have already moved on.

The second part of the post pointed out that print media companies are still living in the days of the Internet boom. They’re presenting news much in the same way they did on print. Essentially, they are stuck in uni-directional print mode rather than harnessing the bi-directional benefits of the web. To get out of this rut, they need to focus on three core ideas (or tenets):

1. Be a Resource – Create products/applications online that are compelling to users. These products will keep users coming back even when they believe your news is boring. Organize your content in ways that establish your site as an expert on relevant topics. Become almost encyclopedic on those topics and offer numerous ways to browse relevant content.
2. Make Life Easier – Use all of the tools in your online toolbox – behavioral modeling, personalization, customization, site search, path tracking and others to learn what your customers want. Then present them with that functionality wherever they want it – mobile apps, web and desktop widgets or on your site. That’s how people start associating your brand with innovation, new thinking and value within your industry.
3. Focus on the Money – Both of the tenets above have to be done with the idea of how you’ll generate revenue from them in the short-term and in the long-term. Ideas for which you cannot demonstrate ROI are ideas that should not be pursued.

Success is dependent upon thinking about the news differently. Come to see your company’s core competency as providing functional access to information and you’ll win. Stay stuck in the thought that you’re providing news and it’s likely your company will join the dead pool.

I suggest checking out Bloomberg, L.P. for a company that gets news right. Also, while I focused on the news business, the tenets here are applicable to every print media company in the process of transitioning to the web.

But, this brings me to another thing that bothers me about mobile carriers. Why are they in the phone selling business at all? Think about that iPhone for which you just paid $199. The PR spin is that the phone is so expensive that AT&T has to subsidize it. As a result, they have to lock you into a contract so they can recoup the losses they made subsidizing your phone. That may or may not be the total truth, however. What is never said is that the iPhone 3GS is estimated to cost Apple ~$179 to build. The unsubsidized price at AT&T is $599 (Apple sells it to AT&T, reportedly, for $399). That’s quite a hefty profit margin. Such margins are likely to make computer manufacturers and retailers very jealous since their margins are in the 10-20% range, if they’re lucky. The reality is the phone margins are artificially high. Manufacturers charge carriers more for phones than they would in a truly free market system because they know (and the carriers know) the carriers will make their money back on monthly fees for phone plans, text messaging and unlimited data. This is my own estimate but assuming even an optimistic 30% margin, the iPhone would likely go for around $235 if you could pick it up at your local electronics store and not have to worry about the carriers’ funny math.

To my mind, such cell phone antics both inhibits innovation and artificially stifles demand. Regardless of the phone I get, the two year contract makes it likely I won’t consider upgrading to another phone as long as I’m under contract. After all, why would I want to pay the unsubsidized (artificially high) price for a phone even if my current one is outdated and no longer suits my needs. I may want the brand new handy dandy phone, at the unsubsidized price of $600 it just wouldn’t make sense – not if I can wait a year until my contract is up and pay $200. Demand is squashed. If demand was higher, the mobile innovation curve would undoubtedly change for the better.

As far as I’m concerned, like your telephone provider, mobile carriers should only provide the connectivity on which the phones work. They should leave the devices and app stores to be managed by the free market which would put customers’ needs first. Carriers would protest that people expect them to assume responsibility for supporting their phones. Well, we expected AT&T to handle our phones when it was a monopoly, too. We got over it post-monopoly and became pretty used to buying phones and upgrading when the mood hit us. Let’s hope it doesn’t take government regulation to get the carriers to start acting in the best interests of consumers…

Disclaimer: I have service from both AT&T and Verizon and am generally satisfied with both – though I sometimes disagree with their business methods.

Dell became great during a time when differentiation didn’t matter. In fact, their business model is built on a lack of differentiation between devices. Their strength is their ability to offer cheaper prices because of scale. Cheaper prices haven’t been all that important in the mobile phone business. If people like a phone, they pay for it. Dell likely went to the carriers trying to get an exclusivity deal and “differentiation” absolutely matters there. Danger could have offered Dell some opportunity for differentiation by extending the range of their platform, but Microsoft snapped them up.

Given the economy, there may be some hope for them if they can get something out fast. A low-priced smartphone targeting parents and their tweens/teens could have some legs if it offered great parent-centric features without seeming too restrictive to the kids. Similarly, though RIM and Apple own the hearts of the most savvy cell phone users, most cell phones are a few years old and are dumb. In keeping with their business model, there’s a great opportunity for Dell to reach those users who need to upgrade because they want new features but don’t need the whiz-bang technologies of a Blackberry or the iPhone. That also happens to be a place where differentiation isn’t all that important as long as the target audience knows what the primary benefit is.

Dell has the heft to make a strong entry into the cell phone business. I’m they’re keeping their eye on the right bulls eye.

As I’ve previously indicated in this blog, I love mobile. As such, I’ve recently imbibed on the iPhone Kool-Aid and have taken up investigating iPhone application opportunities. In doing so, I began to realize something interesting — marketers are right back in 1995 with their engage-the-masses, cross-our-fingers mindset. Case in point… Target. Yes, Target.

A recent article from USA Today indicates that consumers are trading down and companies like Target are being hurt in the process as consumers switch to WalMart and other lower cost alternatives. Per the article, Target’s net profit and same stores sales were both down last quarter as a result of consumers’ new found frugality. To my mind, Target is missing something because some shoppers should be trading down to it. And which shoppers in particular do I think should be schlepping into Target – everyone’s favorite customer, the 18-34 crowd.

This group, most recently flush with money either from their parents or from high-paying jobs, has shopped at Target and target.com for incidentals, but rarely for clothes. That’s what boutiques and mid to high-end stores were for, but not anymore. Those jobs are fading and parents’ portfolios aren’t what they used to be. The over abundance of money has faded, but this audience of fashionistas, urban hipsters, college students and young moms still have to purchase things someplace and to my mind Target and target.com should be that place.

Now, before I go on, I’d like to point out that much of what I’m about to say is based on anecdotal evidence. Though research indicates men are most likely to buy iPhones, my experience is that a significant number of women apt to shop at Target use iPhones. Additionally, more recent research tells us that iPhone owners are becoming more diverse and that since the launch of the iPhone 3G “the strongest growth in users is coming from those earning less than the median household income.”

I say all of this to say what. It’s time for brands like Target to act. Target has an application on the iPhone App Store that allows people to choose gifts for others. I can only imagine what users of the app are thinking – “What about me?” Gifts for others are great, but as a person who knows a thing or two about being selfish, I want to know how an app can help me. To that end, iPhone apps offer retailers like Target, who are losing their cachet, an opportunity to “speak” to buyers who are trading down. They may not be able to shop at Pottery Barn or Nordstrom, but they still need to buy things. An iPhone application can hone in on what they want and present it to them with an experience unique to the iPhone. Make users’ lives easier. Moreover, the device can encourage online purchases or offer unique opportunities that drive traffic to local stores – helping to maintain same store sales rates. To paraphrase speculators in the old West, “There’s gold in them iPhone hills.”

This entry is lengthy enough, but there’s something I like to remind people of with regard to marketing with new technologies:

• From platform to platform and technology to technology … marketing is marketing is marketing

To that end, remember to:

1. Always segment and focus on customers’ needs and making their lives easier
2. Seek out new opportunities with new technologies. Don’t use one technology the same way you’d use another. Innovate.
3. Stay true to your core. Don’t stray from who you are and your core brand message. You can lose your audience and it’s too hard to get back to center.

Everyone, it seems, is creating the next iPhone. Google’s G1 is the most recent device to throw its hat into the ring, but they’re not at all alone. Blackberry is on its way with the (initially) Verizon Wireless marketed “Storm”, also called the Thunder. Nokia will soon be launching the Nokia 5800 Tube, the first phone that implements its S60 Touch UI. And, let’s not forget the Samsung Instinct, which actually sold well, and their beautiful but not yet available in the States, Samsung Innov8. Each of these phones are being released to provide competition to the iPhone – in some ways, to be the next, but better, iPhone. I’m sick of it.

The iPhone is a great phone. I do not have one, but often wish I did. My Nokia N95 is very nice, but there’s something excellent about a touch screen. I like the idea of being able to browse the web almost as I would on my desktop or notebook. I think the UI is amazing – especially for a company taking a first shot (technically, 2nd if you include the Newton) at a mobile OS. It’s size is almost perfect and now that it has 3G, it really is a killer phone. The thing is, for what they did, they nailed it. They got it right. They left little room for error and the marketplace acknowledges that with its demand. Given that, why is everyone stuck on creating the next iPhone? Apple created the next iPhone with the 3G iPhone.

The phone manufacturers should be looking at creating some above and beyond the iPhone. RIM should be looking at creating the next Blackberry, Nokia, the next Nokia and Samsung, the next Samsung. What does that mean? These companies need to focus on their strengths. RIM should be looking to revolutionize what business users can do on their touch-screen Crackberries. People should feel almost as if they don’t even need their laptop because they can do 75% of what they need to do on the Blackberry. Nokia, on the other hand, should focus on reliability, functionality and its ability to stay slightly ahead of the curve. Nokia doesn’t create the greatest looking phones. They create the most reliable phones and, with its S60 platform, highly functional phones with lots of capabilities. Honestly, I don’t know what the hell Samsung does well, but people are beginning to like their phones judging by the reaction to the Sprint Instinct and the Innov8.

To my mind, each of these companies will only succeed if they stick to their core strengths and stop worrying about the iPhone so much. If Blackberry users wanted an iPhone, they’d buy one (and may have already), but they’d likely still keep their Blackberry. If, as an N95 owner, I wanted an iPhone, I’d go out and get one, but I trust Nokia’s reliability and like the options I have with the N95. When competing with the iPhone, other manufacturers will only be also-rans and the more time they spend competing solely against the iPhone, the more time they will spend as also-rans. It’s a sad truth. However, if they focus on their core strategies, do what they do well and bring devices to market that exceed expectations, they easily stand more than a fighting chance of giving the iPhone true competition.

I gave up my Palm device years ago. They got boring. Handspring began to slay them with the Treo, so they bought that company and saved themselves. Then, they sold their operating system so that they would no longer be able to update their dated platform. Smartly, they licensed it back — but made only minor tweaks to it. More recently, Palm has been able to hang on by the hairs of their chinny-chin-chins thanks to the success of updated Treos and the switch to the more modern (but tsill crappy) Windows Mobile platform.

Palm’s life depends on their new Linux based operating system — which no one knows by name or has ever seen. They announced the OS in April, 2007, but had been working on it for a few years prior. Since the announcement, the mobile landscape has changed dramatically (e.g. Apple’s iPhone, HTC on the Windows side and Google Android phones now appearing) and one can’t help but think that the oft-delayed OS may never see the light of day.

Call me an idiot, but if I were Palm, I’d ix-nay (I’m fluent in pig latin) all the secrecy around the new OS and would begin trying to get people excited about the platform. Start leaking something and create some buzz. Unless phones based on the new platform can be controlled telepathically, chances are we’ve seen it all before. If I were them, I’d start a PR assault that made it seem like my life depended on the success of it. In Palm’s case, it probably does.

Running campaigns where your customers buys $1,000,000 widgets offline rather than $100 cogs by clicking the “Buy Now” button is a different world. B2B marketers have to think differently and, once you get online, and take away the face-to-face sales effort which helps make B2B companies so successful, it can be a challenge. Don’t believe me? Take a look at the web sites of most B2B enterprises (e.g. chemical companies, shippers, device makers, etc). Their sites look like the were built in 2000 with little updating since. There’s a reason for that. They don’t believe in the power of the web.

In our new Marketnology^SM Insights whitepaper, we try to help them out. It’s a lot easier to take action when you have an idea about the steps you can take to implement a plan. The whitepaper, B2B Marketer’s Guide to Getting the Most from Your Web Presence details for B2B marketers a few technologies that they need to be paying attention to and shares a list of top vendors with products in each category. Among the technologies included are Analytics, SEO, Targeted Email, Marketing Automation, Video and Mobile.

Each of them has a lot of value for B2B marketers. Together, they offer marketers a powerful set of tools for redefining themselves online — something B2B marketers have to start doing if they want to find more success online.

Visit the Actuan web site to learn more about Actuan.

The New York Times features an interesting article today that talks about Sprint’s travails and includes some quotes from Sprint’s CEO, Daniel R. Hesse. It looks like he’s implementing some painful changes over there in an attempt to recover from the consequences of their customer service mismanagement and other woes. If he can pull this off, we could actually end up with three real mobile phone competitors. How interesting.